Residential home building permits issued, Baldwin County2021: 3,7052016: 2,5202011: 756
Slower, pricier, but continuing are the words real estate experts are using to describe home sales …
Slower, pricier, but continuing are the words real estate experts are using to describe home sales in Baldwin County recently.
National headlines have declared a slowdown in the market nationally as interest rates climb and both buyers and sellers are heading to a slowdown. While the market in Baldwin is slowing, a continued influx of new residents means home sales remain stronger than in many other parts of the nation.
“Baldwin County kind of used to be a little secret. Not anymore,” said Brian Armstrong, president of the Baldwin County Homebuilders' Association. The association is the third largest in the state of Alabama and the 11th largest in the nation. “People are moving here from all over the nation. I heard the other day it’s 16 people a day. And all of those people have to have a place to live.
“Whether they are building a house or buying a house our market here is really, really strong,” he said. “It’s not going to be affected like the national market.”
That doesn’t mean, however, that the local real estate market is bulletproof.
The first signs of buyer reluctancy in the Baldwin County Housing Market began in March with a 2.5% decrease in total sales.
By April, traditional home sales were down 4.8% from the year prior.
In May, the number of sales dipped again slightly, however prices in many areas of the county rose to the highest they have ever been. In the county's southern most cities, including Orange Beach, Fort Morgan and Gulf Shores, the average sale price skyrocketed to $737,378, a local record.
The rest of the county also enjoyed increased prices, hitting an average sale price of $383,965, an 18.3% increase from May of 2021.
Prices continued to rise in June, July and August, even though the number of total homes sold dipped slightly. Nationally the median price of new homes hit $403,800 in July, up 10% from a year ago, a rise Armstrong attributes to inflation that impacts taxes and fees as well as labor and supplies.
Armstrong said Alabama's lower home price continue to buoy the market here as families sell their homes in other states and use cash from those sales to buy less expensive homes in places like Baldwin County.
"Houses in here are still priced well below what they would cost in the rest of the U.S.," he said. "Our prices are not as high as New York City or California. People are moving here from all over where they sold their houses for a lot higher price and come here with cash, so the interest rate doesn't affect them."
Higher interest rates, however, are pricing some buyers out of the market, even in Baldwin County, a factor that is driving the drop in sales across the board.
"As houses go up in price, affordable housing becomes less and less. Inflation over the last couple of years, since COVID hit really, is out of control. It is pricing people out of the market," Armstrong said. "That is one of biggest fights the homebuilders' association has on the local, state and national level. We're fighting for affordable housing. We want people to be able to buy houses, so we are trying our best to keep prices down."
Tommy Stanton, a realtor with EXIT Realty Gulf Shores and Baldwin Realtors 2022 President, said he agrees that inflation and higher interest rates are causing buyers to be slower to commit.
"The media has a big influence on consumers, and I feel like they might not have as much confidence in the national economy as they have in years prior with the recent inflation and interest rate increases," he said. "Across the county, price adjustments are happening more frequently, and sellers are having to adjust and become more realistic with expectations."