Market Spotlight: Phenix City
For this month’s market spotlight we are heading to the only part of Alabama on Eastern Standard Time, the Phenix City area. Just across the Chattahoochee River from Columbus, GA, the area has shown impressive growth in both residential sales and price appreciation, and was one of the Alabama Center for Real Estate’s (ACRE) markets to watch in 2019. Located at the easternmost point in Alabama, Russell County is the only Alabama county in the Columbus Metropolitan area. The world’s busiest airport is a short drive away, and major seaports, rail systems, and a strategic location create opportunities for economic development in the region. The area has a workforce of approximately 108,000, and it’s hard to underestimate the impact of nearby Fort Benning. Not surprisingly, this area has seen impressive growth in both closed sales and price appreciation in the first half of 2019.
After a strong June (15.6% year-over-year growth), total residential sales in the Phenix City area are up 26.5% year-to-date (YTD), making it the fastest growing market among Alabama’s 14 metropolitan areas. Athens is second with 12.6% sales growth YTD, and this helps demonstrate the impressive growth of residential sales in the Phenix City area. Additionally, statewide sales are up only 1.8% YTD from 2018, and four metro areas in the state have seen declining sales in the first half of the year.
Residential markets are very much driven by inventory, the number of active listings at any given time. Mirroring statewide trends but to a greater degree, inventory in the Phenix City area is trending downwards as it decreased 20.4% Y/Y in June. The area now has 6 consecutive months of Y/Y inventory declines. For comparison’s sake, statewide inventory was down 11.8% during the same period. Other markets with significant inventory declines in June include Huntsville (-31.1%), Decatur (-22.9%), Dothan (-21.9%), and Athens (-25.2%). With rising sales and tightening inventory, it was not surprising to the area’s inventory to sales ratio (months of supply) drop from 4.5 one year ago to 2.6 currently, reflecting a strong seller’s market in the area. Properties are also selling faster than one year ago as the YTD days on market average declined from 108 in 2018 to 101 in 2019.
While median sales price in the area declined 9% Y/Y in June, it is up 7.5% YTD, well ahead of the statewide average of 4.1% during the same period. Strong price appreciation in 2018 was one of several reasons that the Alabama Center for Real Estate identified the Phenix City area as a market to watch in 2019. With strong momentum from an outstanding first half in 2019, it will be interesting to see if record year for residential sales is in store for the Phenix City area.
CCIM 4Q19/1Q20 CRE Insights Report