TUSCALOOSA, Ala. - The housing market in Alabama continues to send a mixed message, according to the Alabama Real Estate Research and Education Center (AREREC) at The University of Alabama.

The number of existing homes sold in Alabama fell for the second consecutive month in August. After the first decline of the year in July, the number of existing homes sold fell another 6.5 percent in August, down from 5,542 in the prior month to 5,175. However, existing home sales, year to date, for the state are still 20 percent higher than for the same period in 2003.

On a more positive note, the state’s average selling price for existing housing rose in August by 3.2 percent, to $137,112 from $132,916 in July. This represents a 2.4 percent premium over the average home price reported in August 2003. At the same time the supply of used homes declined. The number of homes listed fell from 25,400 in July to 25,306 in August. At the current rate of sales this represents a very short 4.9 month supply of homes. On a year-to-date basis, total homes listed fell 3 percent from 213,464 in 2003 to 207,207 in 2004.

According to AREREC, statewide, the number of days a house is on the market fell from a tight 128 in July to an even tighter 126 in August, additional evidence of a strong residential real estate market. The average number of days on the market has not been this low since mid-1997.

The national average selling price fell from $243,100 in July to $241,400 in August, but is still up 7.7 percent compared to the same time last year. Nationally, the number of existing homes sold declined 2.7 percent from the previous month, but new home sales jumped 9.4 percent during August. This is the largest monthly increase in new home sales in almost four years. As is the case with Alabama’s housing numbers, the national statistics also seem to be sending mixed signals, but, on balance, the nation’s housing markets appear very robust, according to Dr. Leonard V. Zumpano, director of the real estate center.

On a regional basis, the number of existing homes sold in the South rose 5.1 percent. This is the highest year-to-date increase of any region in the country. The Southern region also saw a 12.6 percent increase in new homes sold in August.

At the local level, existing home sales decreased in 12 locations, increased in six locations, and remained unchanged in two locations. Baldwin County saw an increase of 42 percent in existing homes sold, and a decrease in homes listed year-to-date of 21 percent. These statistics, coupled with a 23 percent increase in average selling price, are strong indicators of the strength of the housing market in Baldwin County, Zumpano said, but he pointed out that Hurricane Ivan will have a powerful impact on Baldwin County’s statistics in the near future. Calhoun County stood out from the crowd by setting an all-time high of 132 existing homes sold in August. Covington County also set a record that month with an average selling price of $87,900. Finally, the Wiregrass region of the state put up some impressive statistics in August. Existing homes sold are up 58 percent for the year and the average days on the market fell to 129. This is the lowest number of days on the market since October 2000.

“Whether the housing market will set another record in 2004 will depend on what happens during the final quarter of the year,” Zumpano said. “Given so many uncertainties regarding the Iraq war, oil prices, employment, the presidential election, and the recent disclosure of financial problems at Fannie Mae, it is anyone’s guess as to how the housing market will finish the year. Barring a major shock to the economy during the last three months of the year the housing sector should finish strong if not in record territory.”

The Alabama Real Estate Research and Education Center is part of The University of Alabama’s Culverhouse College of Commerce and Business Administration. The UA business school, founded in 1919, has been recognized repeatedly for offering a high-quality, cost-effective education.