Real estate market still strong

Alabama home sales topped out at 57,083 units sold in 2007, a 5 percent decline from 2006, according to the University of Alabama's Center for Real Estate.

Even so, 2007 was the third best year on record for home sales in the state.

The center reported that consumer confidence was lower toward the end of 2007 because of turbulence in the mortgage and credit markets, along with the increasing national foreclosure rate.

The Shoals, however, was at the top for the mid-sized markets and experienced a 4.62 percent year-over-year sales growth.

"Our market is strong. We did have a really good year in 2007, and we're expecting good things to happen this year," said Charlene Isbell, president of the Realtors Association of the Shoals.

For 2007, Isbell said there were 1,801 local homes sold, with an average selling price of $132,129 and an average of 71 days spent on the market.

"It's a good time to sell and a good time to buy," Isbell said. "The seller can get a good price on a home and there's a lot of good homes to find for the buyer."

Much of the Alabama housing market has been in a period of adjustment, though, since the middle of the third quarter of 2007, said Grayson M. Glaze, executive director of the real estate center.

"Demand has understandably tempered as consumers paused to digest national housing headlines and to gain a better read of their local real estate market," Glaze said.

State housing inventory peaked in July with 44,921 units for sale and finished 2007 with an inventory of 41,604.

The current housing inventory is 19.17 percent higher than December 2006, Glaze said.

"The center will continue to closely monitor this very important market indicator, as the reduction in excess supply will be critical for the market to regain positive traction during 2008," Glaze said.

He explained that the inventory-to-sales ratio is important in determining a healthy sales pace, which is typically about six months. Glaze said that in December, the state's ratio was at an unhealthy 11.1 months, indicating when the existing supply of homes would be depleted.

In December 2007, the inventory-to-sales ratio for the Shoals area was seven months. The rate for the Shoals area "has consistently been within the favorable ranges for the last several years," Glaze said.

He said the Alabama market will continue to reflect a period of correction as demand will likely remain softer than normal.

"2008 should represent another solid year for Alabama real estate," Glaze said.

"It may simply be unrealistic for the Alabama housing market to match the record-breaking sales pace of the last three years."

Kenda Williams can be reached at 740-5720 or kenda.williams@timesdaily.com.