Dr. J. Reid Cummings, director of the Center for Real Estate and Economic Development (CREED) at the University of South Alabama, recently released a report revealing how real estate across all sectors in Baldwin and Mobile counties has fared year-to-date when lined up with last year’s yardsticks
Drilling down, the study juxtaposed markets for the first three quarters (Q1 to Q3) of 2019 as compared to local area activity over the same period covering 2018. Here are the results:
Baldwin County, Q1 to Q3, 2019
Existing single-family unit sales declined 8.8 percent during the first three quarters of 2019, with 4,273 moved compared to 2018’s 4,683 transactions.
Sales volume increased, however, finishing 11.8 percent higher at $1.27 billion through September 2019.
Average sales value rose sharply, ending up 20.3 percent at $219,500. Median sales value (arguably the more significant metric) was also higher at $216,700.
The number of new home sales fell slightly, totaling 1,059 transactions for the first three quarters. Total sales volume also declined, ending 4.7 percent lower at $286.8 million.
The average sales value rose to $271,400 while the median sales value was down 3.1 percent to finish at $252,600.
Condominium unit sales were steady, registering only a slight decline to finish with 1,904 transactions. Sales volumes increased, however, rising to $687.2 million. Average and median sales values were both higher as well, ending the period at $358,200 and $287,500, respectively.
Commercial real estate activity showed its strongest gains to date, ending the period with 283 transactions on total sales volume of $232.4 million, a 17.7 percent increase. Average sales value rose slightly to close at $792,500, while the median sales value ended lower at $258,200.
Mobile County, Q1 to Q3, 2019
Existing single-family home sales were off by 16.7 percent for the first three quarters of 2019 versus the same period in 2018, with 4,977 transactions.
Average and median sales values were both higher, gaining 9.3 percent and 11.1 percent, respectively.
Total sales volume fell 9.6 percent to end at $666.2 million versus $737.1 million in the comparable 2018 timeframe.
New single-family home sales declined slightly, with 19 fewer new homes being sold in the first three quarters of the year versus the same period in 2018.
Total sales volume also declined, dropping from $55.4 million during the first three quarters of 2018 to $53.9 million in 2019. For the period, both average and median sales values were higher, up 5.6 percent and 9.7 percent, respectively.
Condominium unit sales rates dropped 19.9 percent over 2018. Sales volume for the 140 units changing hands totaled $21.3 million for the period. The average sales value finished ahead 2.5 percent at $151,200, while the median sales value fell sharply to $94,000.
Commercial real estate sales for the year have seen declines across the board. Sales volume was down 54.1 percent, finishing at $211 million for the period. Sales activity also declined, totaling 21.9 percent less than last year.
Average and median sales values were both lower, ending the period at $727,800 and $219,500, respectively.
“At this point last year, following a quarter-point increase, our commentary highlighted the possibility of continued interest rate increases by the Federal Reserve,” Cummings wrote in the report. “At that point, seven such increases had occurred in the previous three years and the Fed was expressing concern over the need to slow the economy down a bit. It acted on Dec. 19, 2018, by raising rates another quarter of a point, but at the same time, indicated rate increases were over for the foreseeable future.”
He went on to say the trend has reversed since that time frame. After cutting rates in July for the first time in years, the Fed acted again in September, dropping its benchmark overnight lending rate to a target range of 1.75 to 2 percent.
“The question now is whether there are more cuts ahead,” Cummings said. “Based on the Fed funds futures rate the answer appears to be ‘yes.’ What happens next, as always, is anyone’s guess.”
More information on the study can be found at: southalabama.edu/colleges/mcob/creed/realestatemarket.html
Alabama hits record highs in job growth, lows in unemployment
On an upbeat note — and in the spirit of Thanksgiving — the secretary of the Alabama Department of Labor, Fitzgerald Washington, recently announced attention-grabbing numbers on employment. The Yellowhammer State reportedly hit record lows in unemployment and an apex in job formations last month.
The preliminary, seasonally adjusted unemployment rate was 2.8 percent in October, down from September’s rate of 3 percent, and well below October 2018’s rate of 3.8 percent.
“More than 80,000 Alabamians are working today than last year, and 20,000 fewer people are counted as unemployed. Our economy is supporting over 2.1 million jobs, more than ever before,” Gov.Kay Ivey said in a prepared statement.
“Alabama has never experienced an unemployment rate in the 2 percent range,” Washington said. “In October, manufacturing employment was at its highest level in more than a decade and record high employment was recorded in the professional and business services sector.”
A new record low of 63,333 unemployed persons was counted, compared to 66,883 in September and 83,400 in October 2018, equating to an over-the-year decrease of 20,067.
Wage and salary employment increased in October by 7,900. Monthly gains were seen in the trade, transportation and utilities sector (+ 3,100), the professional and business services sector (+ 3,000) and the government sector (+ 2,600), among others.
Manufacturing employment measured 271,600, which is its highest level since November 2008, when it measured 273,600. Professional and business services employment measured 259,700, a record high.
Counties with the lowest unemployment rates last month were: Shelby at 1.8 percent; Marshall at 2 percent; and an eight-way tie between Blount, Crenshaw, Cullman, Lee, Limestone, Madison, Morgan and Tuscaloosa, all coming in at 2.1 percent.
Counties with the highest unemployment rates were Wilcox at 6.3 percent, Greene at 4.8 percent and Clarke at 4.7 percent.
Major cities with the lowest unemployment rates were: Vestavia Hills at 1.5 percent; Alabaster, Homewood and Northport at 1.6 percent; and Hoover and Madison at 1.8 percent.
Major cities with the highest unemployment rates were: Selma at 5.2 percent, Prichard at 5.1 percent and Bessemer at 3.7 percent.
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