Orange Beach, Alabama, renowned for its stunning white sand beaches and picturesque inland waterways, has become a highly sought-after location for both primary residences and vacation homes. Known for excellent boating, fishing, and water sports opportunities, it stands out as one of the premier waterfront destinations in the United States, especially in the Southeast.

Why Choose Orange Beach? Orange Beach offers not just a serene escape but also lucrative real estate investment opportunities. Whether you’re looking to unwind in a vacation home or explore investment options, Orange Beach’s real estate market, supported by experts at Lake & Coast, presents a wealth of opportunities.

Market Analysis: A Shift to Buyer’s Market  As highlighted in my 3rd Quarter 2023 Market Update, Orange Beach’s condo market has been tilting towards a buyer’s market. The 2022 market absorption averaged at a 4-month supply, peaking at 9 months in November. In contrast, 2023 saw an average absorption rate of 7.5 months, with a notable peak of 16 months in November, dropping to 10 months by December end. Typically, the 4^th quarter of each year is the slowest for condo sales with more units hitting the market and driving up the absorption rate artificially. The noteworthy increase of months of inventory in one year, coupled with the current 10-month supply, indicates a shift towards a buyer’s market.

Q4 2023 Real Estate Insights

• Average List Price: The average list price for sold condos was $843,661, closely aligning with market expectations.
• Sales Performance: A total of 119 properties were sold in Q4 of 2023, with 177 new waterfront condo listings hitting the market, a decrease from the previous quarter’s 310 new listings.
• Market Inventory: The inventory at the beginning of 2024 stands at 335 listings, showing an upward trend in available properties for sale.
• Days on Market: The average number of days on the market for sold listings in Q4 was 70 days, up just 16% from the same quarter the previous year. The current average days on the market for active listings is 137 days, double that of sold listings.

Factors Influencing Sales Overpricing is one of the main factors affecting the length of time condos sit on the market longer than the average. Other items influencing sales are décor, lack of maintenance and upcoming assessments. If your condo has been on the market longer than six months, then it may be time to reevaluate your property and discuss options that may help improve the sellability.

Sales Price Trends The average sales price in Q4 of 2023 slightly decreased by 0.6%, from the previous year, averaging at $817,275. The previous quarter saw an increase of 10% over 2022. This shift reflects buyer preferences for less expensive options, likely influenced by higher interest rates. However, the market shows resilience, with the average listing price continuing to rise, promising long-term gains for waterfront condo owners.

Orange Beach waterfront condo sales performed slightly below the national average for all home sales from 2022 to 2023. According to metrics tracked by NAR national existing homes sales for 2023 was the slowest since 2008 an 18 percent drop from 2022. Orange Beach’s annual waterfront condo markets sales dropped by 26% from 2022 with 574 units sold in 2023, which is still positive based on the number of units currently available for sale.

Ginger Chambless, head of research for commercial banking at J.P. Morgan, said in her 2024 economic outlook. “Given the already large drop in recent years, we think the housing market is one area of the economy that could perform better in 2024 than in 2023, even if trends remain soft in the near term.” Most economists would agree with her outlook, which is a positive for existing sellers and those looking to place their property on the market.

Partner with Lake & Coast for Success For those seeking guidance in navigating the Orange Beach real estate market, Lake & Coast is your go-to resource. Our deep understanding of market trends and effective marketing strategies makes us the ideal partner for your real estate needs. If you’re considering selling your Alabama Gulf Coast property, Lake & Coast has your go-to experts. Start your search or sale with Lake & Coast.