The Real Deal

By Sharman Egan Lagniappe columnist

If you read my last column, you know Mobile ranked 17th out of 282 U.S. cities in housing appreciation in 2006, with prices rising an average of 14.66 percent. That’s great news, but if you’re like most people, you want more detail. What are homes selling for and how fast are they selling? Which areas are hottest and, most importantly, how does your home fit within the market?

Recently I tripped across a Web site, http://blog.mymobilerealestate.com, with the best residential real estate statistics I’ve seen for this area. The stats are compiled by Barbara Reeves, a Realtor with ReMax by the Bay in Daphne, using data from the Gulf Coast Multiple Listing Service.

So what do the numbers show? First I have to give the fine print: as stated on the MLS Web site, “all information is believed to be correct but is not guaranteed.” Reeves’ analysis includes select areas on each side of the Bay, and the figures are from March, the latest data available as of the writing of this column (April data may be posted on the Web site by the time you read this). And, of course, these figures only include homes listed by real estate agents who are members of Gulf Coast MLS.

Let’s start on the Eastern Shore (we’ll look at the city of Mobile in my next column). The numbers indicate that Daphne is the best residential market on either side of the Bay. In March, Daphne had an “absorption rate” of 3, or just 3 months of “inventory” on the market. This is realtor-speak for how many months on average it takes to sell a home. Reeves calculates this figure by dividing the number of homes on the market by the number of homes sold plus pending sales. Realtors generally consider 3 months of inventory to be an indicator of a healthy real estate market.

Here are details for the Daphne market:

• 43 homes sold in March, at an average sales price of $231,823

• 73 homes pending (under contract but not yet closed), at an average price of $258,940

• As of April 1, 347 homes were listed for sale, at an average list price of $344,065

The Eastern Shore is also the home of what is seemingly the weakest market on either side of the Bay: Spanish Fort.

• Just 8 homes sold, at an average sales price of $254,529

• 10 homes pending, at an average price of $256,650

• 181 homes listed, with an average price of $609,003

• 10 months of inventory on the market (a pretty scary number)

Fairhope falls between these two extremes.

• 23 homes sold, at an average sales price of $300,171

• 51 homes pending, at an average price of $492,673

• 382 homes listed, with an average price of $422,961

• 5 months of inventory on the market

What do these numbers actually mean when you study them? The first thing that strikes me is the wide gap between the average price of homes sold and the average price of homes for sale, especially in Spanish Fort.

Reeves explained that the Spanish Fort numbers are distorted by The Blakely at Cypress Point. This new condo development accounts for about half the homes currently listed in MLS in Spanish Fort. With prices ranging from $499,900 to almost $2 million, it is priced well above typical homes in the area. If you remove The Blakeley from the picture, the Spanish Fort market looks more like Fairhope, with about 5 months of inventory on the market.

Of course, it does make you wonder whether there’s a market for The Blakeley. There were no sales of homes over $499,900 in Spanish Fort in March, and this is the starting point for these condos. There’s also a wide gap between the prices of the homes sold and those listed in Daphne and Fairhope. This tells me that lower-priced homes are selling much better in these markets than higher-priced homes.

The good news is when you look at pending sales, the gap between sales prices and listing prices narrows for the Daphne market and completely disappears in Fairhope (unfortunately the picture in Spanish Fort doesn’t change). This may be an indication that the market for higher-priced homes is strengthening.

Barbara Reeves sees the market overall picking up as we move into the prime selling season. “I’m looking forward to seeing the April figures,” said Reeves. “There are indicators that the market is improving. I’m seeing much more traffic to my Web site now than I’ve seen in the last few months. Although it often takes a few months before web site visitors turn into sales, it appears that a lot of seeds are being planted for future growth.”

Stay tuned for my next column. We’ll look at figures for four areas in Mobile: Midtown/Downtown, Springhill/USA, Cottage Hill and West Mobile/Airport.

More Kudos for Mobile

Apparently my last column generated more good karma for Mobile. Right after I submitted it, Mobile was named by fDi (Foreign Direct Investment) magazine as a top ten “City of the Future” among small metro markets in North America. The magazine also chose Mobile as a winner in the Most Business Friendly Small North American City of the Future category and runner-up for the Best Economic Potential Small North American City. For more information, go to www.fdimagazine.com.

Sharman Egan is Lagniappe lagniappe columnist. Contact her at Sharman@SharmanEgan.com.

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