Birmingham May Sales Very Strong and A Positive Outlook

Birmingham Area MLS* Monthly Observations for May 2013

Dollar sales in May improved by 29% to $296,177,850 from April’s $230,177,850, up a healthy 31% from last May’s $226,665,171. The 12 month moving average line for total dollar sales continues to move up indicating improving market conditions. We are in the main sales season and seeing impressive gains.

Birmingham May Projection to Actual

Increases in sales over our projections indicate a strengthening market. The greater increase in dollar sales than unit sales indicates an increase in the sales of higher end homes proportionally as well as a general strengthening in average prices.

Unit sales were up 14% to 1,504 in May from 1,315 in April, an increase of 189. This is up 16% from May 2012 at 1,294.This number will increase as late sales are reported. Our ABRE/ACRE Projections for 2013 projected 1,399 sales for May. For May, actual sales were 8% higher than projections and 0.2% for the year. Please see here for a summary of the projections http://goo.gl/nytW8 and the spreadsheet with details and month by month projections by area http://goo.gl/GEYWa (see the tabs on the bottom).  New sales improved by 5 units to 138 homes this month from 132 in April and are even with 138 last year. Used sales improved 15% to 1,366 homes in May from 1,183 last month, an increase of 183,  and up 18% and 210 units from 1,156 last year(Sect E p.3).

This month total inventory is 14% lower at 9,419 vs. 10,993 last year and 10,122 last month. The drop in the current month is caused by month-end expirations which should come back on the market shortly. Active New listings decreased to 785 in May from 1,098 in April, a decline of 313 units (Sect E p.3).  Housing permits went down in Jefferson County to 104 for April from 115 in March. Shelby County permits went down to 25 from 37 (see website for details).

Absorption rate for New homes is fairly steady. New homes are at 6 months supply this month which is  better than last year at this time at 7 months (Sect E p.3). The New homes up to $700,000 price range have normal inventory levels in the 5-8 month range, except for the $400,000-500,000 price range which is at 10 months of supply. The $700,000-$800,000 price range are 14 months of supply. The over $900,000 new inventory is at 2 months (only one home). (Sect C p.1 and Sect E p.3.)

Absorption for Used homes in May shows 8 months, one month better than 10 months last year. Used Active listings at 8,634 are lower than the 10,131 last year (Sect E p.3). The number of homes listed in the over $400,000 price range has been climbing somewhat faster than sales, resulting in some upward drift in the months of sales. The market performance is highly area specific, so check the area charts.

Birmingham area Average Days on Market for New houses is 180 compared to last month at 221. The Used homes DOM was 135 in May, compared with 135 last month (Sect A p.18). NOTE: DOM for Used homes indicates that well priced homes are moving in less than 6 months.

Average sales price for Sold New homes increased to $277,308 from $248,111 last month (Sect A p2). Average sales price for Sold Used homes increased to $188,806 from $167,349 last month (Sect A p2). The moving average price for Used Homes has been moving up steadily since the beginning of the year. The 12 month moving average line for New home prices has also been heading up quite nicely since the beginning of the year. Average Home prices, New and Used, are improving  (Sect A p2).

TWB 6/15/13

May Huntsville Real Estate Sales Strong

Huntsville/North Alabama Area MLS Observations: Real Estate Market May 2013

May sales improved by 27% to $152,023,248 vs. April at $119,573,006. This was up 6% from last year’s $142,987,716. The twelve month moving average line on the total dollar sales chart is heading up. It is good to see sales pick up in the main selling season..

Total unit sales improved 15% to 916 in May vs. 795 in April, an increase of 121. This was 5% better than last year at 874.

Huntsville May Projections to Actual

Our projections for ACRE and Brander Real Estate for 2013 called for 927 sales in May with actual results 1% under that, and year to date volume is 2% lower than our projection. See here http://goo.gl/nytW8 for an article sumarizing the projections. Here is the spreadsheet with month by month projections by area http://goo.gl/GEYWa (see the tabs on the bottom).

New sales decreased to 121 this month vs. 127 last month, down 6.

Used sales increased to 795 this month vs. 668 last month, up 127 (Sect E  p.3).

Used inventory levels remain high this month at 12 months (see the chart Sect C p.1), with the situation particularly challenged in the higher price ranges. Used homes over $400,000 have more than two years of inventory.

New home absorption is 9 months of inventory overall with last month at 11 months)(E-1). The New Home inventory level in the $300,000-$500,000 is approximately 5-6 months. (Not bad!).

There continue to be a large number of housing permits issued in Huntsville city given the market conditions. For April there were 83, up from 100 in March (chart on the web site).

Total Active listings decreased this month to 8,864 compared to last month’s 9,527, and below last year at this time at 9,006, with the reduction exaggerated due to month-end expirations. (Sect A p.4 and Sect E p.3).  The reduction in inventory is a positive thing. The inventory reduction has been good for the last 8 months; we are however seeing some signs of a summer increase.

Active New listings decreased from 1,667 last month to 1,364 in May, down 303. (Sect E p.3). Active Used listings decreased from 7,860 last month to 7,500 this month, down 360 and slightly below last year’s amount at this time of 7,706. (Sect E p.3).

Average Days on Market for Sold New homes was 160 vs. 165 days last month, with Used at 166 in May compared with 166 in April (Sect A p.18).

Average sales price for Sold New homes was $241,249 vs. $233,622 last month. (Sect A p.2)

Average sales price for Sold Used homes was $154,506 vs. $134,585 last month. (Sect A p.2)

The average price line for Used homes is going up. New home average prices seems to be showing positive direction as well.

TWB 6/15/13

2nd Quarter Alabama Statewide Residential Real Estate Survey Outlook Optimistic

The survey projects expectations for the 2nd quarter of 2013. The scale ranges from 0-100 with 0 being much worse, 100 being much better, and 50 indicating no change expected.

The professional Real Estate community’s optimism soared this quarter. All of the overall indicators are at the highest levels we have seen since beginning the survey in 2010. Sales expectations are at 65 up 10 points from last quarter. Only availability of credit continues to be viewed somewhat negatively, now at 49, up five points from last quarter.

Market Indicators 2q 2013

The national score at 57, up 10 points from last quarter, indicates that respondents are more optimistic about the overall economic picture. The participants are more positive on the statewide conditions at 62 up nine points from last quarter. Inventory expectations improved to 55 up 6 points indicating continued reduction of supply expected. Sellers may see some improvement for the first time in several years with a score of 56 up six points from last quarter. Financing continues to be viewed negatively at 49 indicating that buyers may face tight financing conditions.

Regional Results:

The coastal region continued to remain the most optimistic in the state at 69. On an overall basis all areas sales expectations gained at least 8 points with the lowest being the Huntsville North Alabama area at 61 still, indicating expansion expected.

Regional Outlook 2q 2013

This quarter showed substantial change in expectations in all regions. The results are encouraging, with overall measures in the expansion zone.

Commercial market participants (the majority of the respondents are from the Birmingham market area) turned positive this quarter (Total Stat) at 55 this quarter a five point improvement and climbing 14 points to 60 for sales expectations. Price expectations improved 6 points 52 indicating improved pricing conditions. The score for credit availability is looking stronger, up 7 points to 53, the first over 50 reading for this segment.

North Region

All areas except North Alabama had the highest levels we have yet seen. It is likely that anxiety over the sequester cuts effect on the defense oriented industry, served to dampen expectations. Nonetheless scores were positive and improved over the prior quarter. The total score of 53, up by 6. The sales outlook is positive at 61 up by 8 but with pricing pressure neutral at 51 (up by 6).

North Central Region

The North Central Region overall score improved to 58 up 8 from last quarter. The sales score improved to 65 from 54. Inventory score improved to 55 from 50 with, pricing moving to 56 from 52, and credit at 52.

South Central Region

The South Central Region participants’ outlook for sales improved from 65 from 51.  The only sub-segment declining and in negative territory is the Montgomery, Central Alabama Rural segment with sales expectations at 42, our sample size here was quite small however. The Suburban areas show sales expectations of 69 up from 52.

South Region

The Southern Region sales score are at the highest regional level, 69,  up 8.  Price expectations jumped 7 points to 62.

About the Alabama Real Estate Confidence Index and Survey:

More than 400 professionals responded to the 2nd quarter 2013 survey which was conducted during the month of March 2013. The survey, conducted by the Alabama Center For Real Estate now has the largest participation of any real estate survey. It provides important market insights. Full history and scores for each market segment are located here on the web http://goo.gl/1ByP7

The ACRE Leadership Council  determined the need for a statewide industry confidence index and this was adopted as the Council’s first initiative. Tom Brander, Council Member, was selected by the Council and Grayson Glaze, ACRE Executive Director, to spearhead and work with the Center to conduct and produce its Alabama Real Estate Confidence Index (ARECI). The Council appreciates everyone who participated.

For further information contact Tom Brander at Tombrander@tombrander.com or Grayson Glaze at gglaze@cba.ua.edu

Birmingham Real Estate Sales Show Positive Trends in February

Birmingham Area MLS* Monthly Observations for February 2013

Dollar sales in February improved by 15% to $156,249,103 from January’s $136,050,964, up a healthy 11% from last February’s $141,182,366. The 12 month moving average line for total dollar sales continues to move up indicating improving market conditions. We are still in the slowest three months of the sales season, so it is best not to try to read too much into these results, although the year over year gains are meaningful.

Unit sales were up 7% to 920 in February from 857 in January, an increase of 139. This is down 2% from February 2012 at 936. Our ABRE/ACRE Projections for 2013 projected 1020 sales for February and of course the reported number will increase as late sales are reported. For now, the projections indicated 10% higher than achieved for the month and 6% for the year. Please see here for a summary of the projections http://goo.gl/nytW8 and here is the spreadsheet with details and month by month projections by area http://goo.gl/GEYWa (see the tabs on the bottom).  New sales improved by 8 units to 99 homes this month from 91 in January and are off from 116 last year. Used sales improved 7% to 821 homes in February from 766 last month, an increase of 55,  and up 1 from 820 last year(Sect E p.3).

This month total inventory is 14% lower at 9,028 vs. 10,458 last year and 9,410 last month. The drop in the current month is caused by month-end expirations which should come back on the market shortly. It is encouraging to see total inventory remaining below 10,000. Active New listings decreased to 765 in February from 1016 in January, a decline of 251 units (Sect E p.3).  Housing permits went way up in Jefferson County to 96 for January from 62 in December. Shelby County permits went down to 16 from 17 (see website for details).

Absorption rate for New and Used homes is fairly steady. New homes are at 6 months supply this month which is  better than last year at this time at 8 months (Sect E p.3). New home supply last month shows 8 months. Under $100,000 New homes is at 11 months supply. The New homes in the $100,000-$700,000 price range have normal inventory levels in the 5-8 month range. Higher price ranges are one to two years of supply, although over $900,000 the new inventory is at 3 months (only one home). (Sect C p.1 and Sect E p.3.)

Absorption for Used homes in February shows 8 months, two months better than the 10 months last year. Used Active listings at 7,999 are lower than the 9,487 last year (Sect E p.3). Interestingly, the under $100,000 market with an average list price of $59,571, which makes up 33% of all listings, is at 7 months of inventory which drags down the overall months of inventory for all homes. The number of homes in the over $900,000 price range is beginning to climb from a low level but the months of inventory is still high  (14 months) due to reduced sales levels.

Birmingham area Average Days on Market for New houses is 197 compared to last month at 201. The Used homes DOM was 147 in February, compared with 146 last month (Sect A p.18). NOTE: DOM for Used homes indicates that well priced homes are moving in less than 6 months.

Average sales price for Sold New homes increased to $266,885 from $225,344 last month (Sect A p2). Average sales price for Sold Used homes increased to $158,133 from $150,842 last month (Sect A p2). The moving average price for Used Homes has been moving up steadily since the beginning of the year. The 12 month moving average line for New home prices has also been heading up quite nicely since the beginning of the year. Average Home prices, New and Used, are improving  (Sect A p2). The price of any specific home still remains under pressure.

TWB 3/9/13

ABRE Analytics: 2013 Forecast for Alabama Residential Sales

Last year, ABRE Analytics, a collaborative research partnership consisting of the Alabama Center for Real Estate (ACRE) and Tom Brander, began studying the correlation between unemployment rates and future real estate sales projections in selected markets across the State of Alabama.

View full sizeABRE Analytics: 2013 residential sales projections for selected real estate markets. All rights reserved.

With the release of the metro unemployment data for January 2013, ABRE Analytics is pleased to present our 2nd annual forecast stemming from this methodology and related commentary.

Area	Full year 2011 Actual	Full year 2012 Proj	% chg from 2011	2012 Actual	Err % Diff to proj	Act 2012 % Diff to 2011	Forecast 2013	2013 F’cast to 2012 Act	Method Unemp or last Q
Statewide	36965	41,992	14%	39280	-6%	6%	41,799	6%	Last Q
Huntsville	8610	9,050	5%	9189	2%	7%	9,835	7%	Unemp
Birmingham	12468	14,550	17%	13514	-7%	8%	14,571	8%	Last Q
Auburn	1132	1,138	0%	1233	8%	9%	1,338	8%	Last Q
Tuscaloosa	1743	1,826	5%	1735	-5%	0%	1,935	12%	Unemp
Montgomery	2774	3,679	33%	3111	-15%	12%	3,342	7%	Last Q

Note: the error bars are at +/- 10%

The above table summarizes last year’s results and our expectations for 2013. These predictions assume no “major events”. As expected with any new trends model in its inaugural trial run, the 2012 predictions were mixed. Alabama residential saleswere up 5.9 percent in 2012.

In Huntsville, the forecast was within 2% of the full year 2012 results. In the aggregate, the results pointed in the right direction right, but with some error so this led the team to explore some alternative approaches for this year’s predictions to improve accuracy. In the markets with the greatest error we revised our methods to use the last quarter of 2012 sales via straight line linear regression instead of the unemployment rate. This method appears to be more accurate in most markets historically and hopefully going forward.

With these adjustments, above is the overview of what ABRE Analytics think might happen in 2013. As for the projection of a 12% increase for Tuscaloosa that is out of line with the other markets, ABRE’s opinion is that this may be a little too optimistic, but we have yet to figure out a consistent method to arrive at a better projection for Tuscaloosa in 2013. Of course, the local market’s near-term response to the tornado of April 27, 2011 certainly has a role with the difficulty in identifying a projection that could be presented with more confidence. Last year we experienced a similar issue with Montgomery, which prompted us to develop the alternative methodology of using last quarter sales for predictions.

The method ABRE used for 2012 was based entirely on the January unemployment rate for a market area. The assumption was that the January unemployment rate eliminated the effect of holiday temporary work and would reflect the mood of the populace towards buying and selling a new home in the upcoming year. A standard linear regression line yielded a better than 80% correlation since 2004 in all areas. The standard error however is somewhat high. This method also has the benefit of using two longer term trends, unemployment and home sales, and only at a single point per year, which eliminates a lot of “noise” in both series.

The seasonal regularity of sales is such that if you know the total sales for a year, dividing the total by the average proportion of the yearly sales attributable to a month has shown to be remarkably stable. Exceptions to the regularity do occur, such as fiscal cliff drama and the tax credit for first time home buyers in 2009. ABRE eliminates this data when calculating the monthly spreads.

ABRE originally chose unemployment data as it is one of the more timely pieces of data released by the government, as well as being released by geographies that generally correspond to the reported real estate market areas. Other data from various government agencies are released so late as to not be timely enough for meaningful projections.

So, what ABRE presents is our best estimate of next year’s sales which specifically excludes the possible impact of unpredictable governmental action or inaction, although even this seems to be having less impact as both the populace and markets begin to ignore political histrionics. For what it is worth, ABRE did test everyone’s favorite housing predictor, interest rates, and could not find any useful correlation.

In each case ABRE experiments with prior years data to see how well the prediction methodology would have worked. We tried using the last quarter sales of the prior year to “regress” against the full year sales of the projected (next) year. This is based on the same premise that recent data may be indicative of future results.

In each case, except Huntsville and Tuscaloosa, this methodology (last quarter of the year to the following year) resulted in greater historical accuracy in predicting and considerably better correlation numbers. We did exclude 2010 from the analysis since the last quarter of 2009 had abnormally low sales, (although the full year sales were as expected), due to the 1st time homeowners tax credit that pulled sales into earlier quarters and depressed the year end.

Complete spreadsheets with all data are available as public Google spreadsheets, which also include month by month projections, at http://goo.gl/jtJGW. ABRE presents these projections as a “work in progress” and as a tool for assessing how well current sales are performing against some level of “informed” expectation. You should not rely on them, but nonetheless ABRE hopes the projections are found useful. ABRE welcomes comments and suggestions for improvement.

About ABRE Analytics: Strategic collaboration is one of the keys to accelerating the flow of insights in the 21st century. The Alabama Center for Real Estate (ACRE) and Tom Brander has been successfully collaborating since 2009. The flow of ideas stemming from this relationship have led to solutions to better serve the Alabama real estate industry and consumers. ABRE (ACRE/Brander Real Estate) Analytics is designed to foster future creative thinking while also providing hands-on experience for student interns of ACRE.

About ACRE: ACRE’s core purpose is to advance the profession of real estate in Alabama by providing relevant resources in the areas of research, education and outreach. The Center, founded in 1996 by the Alabama Association of REALTORS, the Alabama Real Estate Commission and the Office of the Dean at UA’SCulverhouse College of Commerce, also acts as an industry liaison for the benefit of business school students pursuing a career in real estate. To learn more, please visit ourwebsite.

About Tom Brander: Tom Brander is a prominent real estate publisher. He produces The Rudulph/Brander Monthly Real Estate Report in the Birmingham, Huntsville and Baldwin County markets. His company, OSWCO, LLC (Open Software Company) is an authorized Google reseller. He has earned the Google apps sales consultant certification and the Google apps deployment certification, from Google. Tom also co-produces the ACRE quarterly Real Estate Sentiment Index and report in conjunction with ACRE. He is a designated ACRE Education Instructor and serves as a member of the ACRE Board of Trustees. To learn more, please visit http://oswco.com.

Alabama Real Estate Confidence Index (ARECI) for 1st Quarter 2013 Trends Upward

The survey projects expectations for the 1st quarter of 2013. The scale ranges from 0-100 with 0 being much worse, 100 being much better, and 50 indicating no change expected.

The professional Real Estate community’s optimism improved in two important measures, sales indications improved from 52 to 55 (expansion) and price expectations improved to the 50 level (neutral) for the 1^st time in the three years we have been doing the survey. Interestingly, availability of credit continues to be viewed negatively and deteriorating now at 44, down one point from last quarter.

Overall Indicators

The national score at 47, same as last quarter 49, indicates that respondents remain somewhat pessimistic about the overall economic picture. The participants remained positive on the statewide conditions at 53 same as last quarter. Inventory expectations declined to 49 from 52 indicating some increases of supply expected. Sellers are likely to be frustrated by pricing, and buyers will continue to have problems getting financing.

Regional Results:

The coastal region continued to remain the most optimistic in the state. On an overall basis all areas remain above 50, indicating expansion expected.

This quarter showed little change in expectations in all regions. The results are still encouraging, with overall measures in the expansion zone, at or over 50.

Commercial market participants (the majority of the respondents are from the Birmingham market area) remained projecting a neutral market this quarter (Total Stat) at 50 this quarter and dropping 6 points to 46 (contraction) for sales expectations. Price expectations are still soft, at 46 vs. 49 last quarter indicating pricing pressure. The score for credit availability is looking weaker, at 46 down from 49 points from last quarter.

North Region

North Alabama experienced a modest deterioration in most scores.  The total score of 47, down from 49, a 2 point decline from last quarter, and slightly below prior year 1st quarter scores. The sales outlook is modestly positive at 53 but with pricing pressure expected with a score of 45.

North Central Region

The North Central Region overall score improved to 50 from 49 last quarter, The sales score improved to 54 from 51. Inventory score moved to neutral at 50 from 52 with, pricing moving to 52 from 49, and credit at 45.

South Central Region

The South Central Region participants’ outlook for sales improved from 50 to 51.

South Region

The Southern Region sales score improved the most, 6 points to 61 the highest of the region scores.  Price expectations jumped 12 points to 55.

About the Alabama Real Estate Confidence Index and Survey:

More than 400 professionals responded to the 1st quarter 2013 survey which was conducted during the month of December 2012. The survey, conducted by the Alabama Center For Real Estate now has the largest participation of any real estate survey. It provides important market insights. Full history and scores for each market segment are located here on the web http://goo.gl/5lt2G

The ACRE Leadership Council  determined the need for a statewide industry confidence index and this was adopted as the Council’s first initiative. Tom Brander, Council Member, was selected by the Council and Grayson Glaze, ACRE Executive Director, to spearhead and work with the Center to conduct and produce its Alabama Real Estate Confidence Index (ARECI). The Council appreciates everyone who participated.

For further information contact Tom Brander at Tombrander@tombrander.com or Grayson Glaze at gglaze@cba.ua.edu

Alabama Coastal Market Review 4th Quarter 2012

This material was presented at the meetings at the Baldwin County Realtors and Mobile county Realtors on October 23 and 25th.

Google Apps and Real Estate and the Internet, Course Slides

This is the material presented to the Baldwin county Realtors and the Mobile country Realtors on October 23 and 25th. Hope you find it useful. Don’t forget to check out http://oswco.com for more information!

Alabama Real Estate Confidence Index Up Compared to 4th Quarter 2011

Summary:

The survey projects expectations for the 4th quarter of 2012. The scale ranges from 0-100 with 0 being much worse, 100 being much better, and 50 indicating no change expected.

The professional Real Estate community’s optimism tempered across the board  for the 4^th  quarter. The outlook for sales (yellow) this quarter is still showing improvement expected, from 58 to 52 this quarter, but not at the same pace as last quarter. This is 6 points higher than last year at this time. The expectations reflect a continued improvement in outlook when compared with the last two years in the 4^th quarter.

Indicators 4th Quarter

While all scores are down modestly except for price expectations, which still indicate modest declines in prices which improved from 48 to 49. Credit availability scores went from 48 to 45, still better than 4^th quarter levels in prior years. The national score at 47, down from 49, last quarter, indicates that respondents are more pessimistic about the overall economic picture. The participants remained positive on the statewide conditions at 53 down 4 points from last quarter. Sales expectations are slightly positive at 52, down 6 points from last quarter. Inventory expectations remained at 52 indicating continued improving conditions expected. Sellers are likely to be frustrated by pricing, and buyers will continue to have problems getting financing.

Regional Results:

The coastal region continued to remain the most optimistic in the state. On an overall basis all areas remain above 50, indicating expansion expected.

Regional Indicators 4th Quarter

This quarter showed deterioration in all measures and in all regions. This is a seasonal phenomena. None the less the results are still encouraging, with most measures still in the expansion zone, over 50, and well above prior year 4^th quarter indications.

Commercial market participants (the majority of the respondents are from the Birmingham market area) moved to projecting a neutral market this quarter (Total Stat) at 50 this quarter vs. 52 and 52 vs. 52 last quarter for sales expectations. Price expectations are still soft, at 49 vs. 47 last quarter indicating pricing pressure. The score for credit availability remains constructive, at 49 down from 51 points from last quarter.

North Region 

North Alabama experienced a modest deterioration in most scores.  The total score of 49, down from 51, a 2 point decline from last quarter, but as with the other areas, still well ahead of prior year 4^th quarter scores..

North Central Region

The North Central Region overall score declined to 49 from 51 last quarter, The sales score declined 4 points to 51. Inventory is continuing to improve at 52 with, pricing, and credit below the 50 mark with pricing at 48 and credit at 47.

South Central Region

The South Central Region participants outlook for sales declined 6 points to 50.

South Region

The Southern Region sales score declined 8 points to 55. Rural participants sales expectations declined 12 points to 51.

About the Alabama Real Estate Confidence Index and Survey:

More than 500 professionals responded to the 4th quarter 2012 survey which was conducted during the month of September 2012. The survey, conducted by the Alabama Center For Real Estate now has the largest participation of any real estate survey. It provides important market insights. Full history and scores for each market segment are located here on the web http://goo.gl/OQyc9

The ACRE Leadership Council  determined the need for a statewide industry confidence index and this was adopted as the Council’s first initiative. Tom Brander, Council Member, was selected by the Council and Grayson Glaze, ACRE Executive Director, to spearhead and work with the Center to conduct and produce its Alabama Real Estate Confidence Index (ARECI). The Council appreciates everyone who participated.

For further information contact Tom Brander at Tombrander@tombrander.com or Grayson Glaze at gglaze@cba.ua.edu

Mid Year Real Estate Review, Alabama

The slides below contain material from the mid year review and comparisons with projections, for the remainder of the year.