While working on some market trends during a recent appraisal assignment I ran across some data that suggests the Alabaster, Alabama real estate market may be on its way back up.
Over the last several years the existing inventory of houses for sale has been a big problem in the area. It reached higher levels than normal because of several factors, including an oversupply of foreclosure and short sale homes and decreased buyer demand. Buyers were hesitant to enter the market because of decreased job security and the tightened credit guidelines imposed by lenders. It appears these factors may have shifted in 2012. I believe banks started to realize that flooding the market with distressed properties was not helping matters. The increase in inventory of low priced houses resulted in declining markets in many areas.
In 2012 we appeared to have a reversed these trends. Take a look at the graph below to see what I’m talking about.
During 2012 existing housing inventory reached levels we have not seen since before 2005. The first and second quarters were the lowest of all periods from 2005 to 2012. This, combined with low interest rates and pent up buyer demand, has resulted in what appears to be an upward shift in the median sold price. If you look at the median sales price trend line in the second half of the year you will see a slight increase.
In 2012 the months of inventory ranged from 3.92 months to 6.69, which is more reflective of a market that is “in balance”. It has decreased from previous years as you can see in this graph.
If these trends continue I believe that 2013 could be a better year than 2012, and I believe property values, which have been slower to respond, could start showing increases. What do you think of the Alabaster market? How is your neighborhood?
If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.
Great graphs, Tom. They tell a good story for locals to interpret.
Thanks Ryan. It’s true, a picture is worth a 1000 words. It sure makes trends easier to see when you graph them out.