Huntsville, North Alabama, July 2008 Real Estate Market Summary


Observations Huntsville, North Alabama, Residential Real Estate Market July 2008:

This summary is from our 100 page full report on the North Alabama real estate market. More information at Http://TomBrander.com

July total dollar sales in the Huntsville, Alabama area were $170,771,045, 2.5% lower than last month’s $175,238,599, and 26% below last year’s level (Section A Page 4). The Huntsville, Alabama area is still joining the rest of the country in experiencing a slowdown in sales as exemplified by the downward curve shown by the 12 month moving average of total dollar sales. It looks like the gross sales are settling into a range between the 2006 and 2005 levels. Relative to the other areas we cover, Huntsville continues to do comparatively well.

Huntsville Sales by month stacked Since 1999

Huntsville Sales by month stacked Since 1999

The chart to the right shows the monthly sales from 1999 to present “stacked ” by month (click to enlarge). Note also that we use a beginning of month convention so August is July data!

One would expect sales to continue between the 2006 and 2004 levels for at least the next year or so. This compares with sales which have dropped to the 2003 levels in Birmingham and the Alabama coastal areas. This is what we think a bottom look like. That does not imply a recovery, simply a stop of the previous falling levels. We still expect to see prices come down in the very slow market. See more commentary on my blog at Http://Tbrander.wordpress.com.

We do see inventory build-up, the used market has showed a very consistent increase in inventory now at the highest level of months of inventory for used houses (9.1 months) since 2005 in all price ranges with the situation being quite acute for higher priced houses for new and used houses over $300,000. We see fairly rapidly rising inventory levels of over a year. (Page E-1). Over $500,000, used houses generally show over 2 years of inventory. Absolute numbers of active listing have been moderating slightly for new houses but used houses continue to come on that market faster than they are selling this month shows a slight decline from last months record number of active used houses, (see below). There are 7% more houses active than in July of 2007 against the lower dollar sales cited above. (Chart section A page 4).

The builders in the Huntsville area are facing a challenge reacting to the market conditions and constraining supply. It is unusual to see months of supply for new houses exceeding used house months of supply, although this situation is improving slightly.  Consumers, sellers of existing houses are having a harder time as the supply increases. The absolute level of used houses for sale is generally increasing each month. The build up of existing housing supply will continue to impact the new housing market.

Total active listings decreased slightly from 8,631 in June* to 8,431 in July a decrease of 200. (See Page E-3). There were 316 new house new listings (an increase from 280 last month), while sales of new houses decreased to 186 for the month from 190 in June. New houses new listings ran 1.7 times the rate of sales (Section B Page 1).

Active New listings decreased from 2,136 last month to 2,002 this month, a decrease of 134 (Page E-3).

Active Used listings decreased from 6,495 last month to 6,429 this month, a decrease of 66 (Page E-3).

Total unit sales deteriorated from 974 in June to 916 in July a decrease of 58 units.

New sales deteriorated from 190 homes last month to 188 this month, a decrease of 2.

Used sales deteriorated from 784 homes last month to 728 this month, a decrease of 56 (Sect E Page 3).

Absorption for new homes was 9.5 months of inventory in July vs. 9.9 last month. This is an increase of .3 months over last year at this time, see Section E page 8. Absorption for used homes was 9.1 months of inventory in July vs. 9.0 last month. This is a deterioration of 2.6 months from last year’s level at this time see Section E pg 8.

Average Days on Market for sold houses for new houses was 156 days vs. 169 days last month, with used at 102 vs. 100 last month. (See Section A Page 18).

Average sales price for sold new homes was $255,909 vs. $253,049 last month. (Chart Sect A Page 2)

Average sales price for sold used homes was $161,661 vs. $159,312 last month. (Chart Sect A Page 2)

TWB 8/10/08

*All references to last month numbers are revised, to pick up late entries (made after our prior publication date) to the MLS system.

Advertisements

6 thoughts on “Huntsville, North Alabama, July 2008 Real Estate Market Summary

  1. Pingback: Huntsville Real Estate Market – July 2008 | Huntsville Real Estate

  2. tbrander Post author

    While to some extent, the absolute “months of inventory” for Huntsville city are not quite as bad as the rest of North Alabama, the new house inventory is worse and the absolute number of houses both new and used is climbing rapidly. In particular the used house absolute number of active listings will continue to pressure the already high inventory of new houses in the Huntsville city limits. The trends are not much different from the rest of North Alabama, the months of inventory for used simply started form a lower level but is now catching up. At least from what my charts show.
    TWB

    Reply
  3. Elizabeth Cooper

    Hi Tom,

    Thanks for the backlink. As you know statistics are all about context and your comments about the ‘Huntsville City Limits’ are right on!!!

    The market segment that I report on regularly and term as the ‘Huntsville Metro Area’ includes Madison City Limits and Madison Outside City MLS areas. Perhaps I should term it the ‘The Greater Huntsville Metro Area’ but all this typing gets to be pain, eh?

    The reason this particular mix is important to my business is that this is where the Greater Metro Area resides, where BRAC relocation will be occurring, and where my major business focus exists. Anyone who lives in Huntsville would understand including the Madison MLS areas as these locations are 5-10 minutes from major shopping areas and 10 – 20 minutes from Research Park and Redstone Arsenal our major employment districts.

    Anyway when including these areas in our analysis and using a consistent active inventory date, I am looking at a MLS report on my screen stating May, June, July 2007 inventory as 2746, 2784, 2813 and 2008 numbers as 2700, 2690, and 2720. Anyway I look at this it appears to be a slight to moderate decease in inventory in the ‘Greater Huntsville Metro Area’; my community.

    Again thanks for the backlink and I agree real estate statistics must be understood in the proper ‘location’ context and appreciate the good work you do and provide to our business community.

    Kind Regards,

    Beth

    Reply
  4. tbrander Post author

    I just eyeballed gross inventory for those (Madison) areas and the gross numbers look to be up to me, used particularly so, partially offset by the reduction of new houses and of course against lower sales, The months of inventory is climbing. I think that the new housing market is quite under pressure even when defined your way. The trends still don’t look that great, as I noted in particular in the higher price ranges.

    It will be interesting to see how this progress. But as I also noted I doubt we will be able to get much direction till the next spring selling season.

    Also I only and always use prior 12 month sales in my inventory calculation unlike Solid Earth! To take in the seasonal variation as best as possible, of course in a declining market it is optimistic, but not as much so as using a fairly peak sales month like July!

    I also appreciate the comments and Link!
    You really need my full report!

    Reply
  5. Elizabeth Cooper

    I agree that ‘new’ inventory is under strong pressure especially if you are considering ‘proposed’ MLS inventory listings which I am not. Since no one can move into a ‘proposed’ home.

    I further narrow my analysis to ‘single family detached’ homes which is my explicit market, which is of course, different from your own broad real estate market focus which is a good thing, but nonetheless ‘Different!”

    Yes, I pull my stats from Solid Earth, which apparently you are not or you massage the pull to improve their reliability, which I must concede to, since I am not privy to your particular mathematical massage. Although as a math major, I would be more than happy to comment on. 😉

    However, my numbers are accurate per the Solid Earth pull, which if you have access to; you would have surely seen as well, within the full area of context that I am pulling (?). (Huntsville City areas and the two Madison areas I previously mentioned).

    If you say your inventory numbers are more qualitative, then so be it, I can only read what is on my screen (from Solid Earth) and have no way to verify that Solid Earth is out in the woods. …I do know that Solid Earth’s numbers are ‘dynamic’ (yep dynamic) and adjust month-to-month (in fact day-to-day) as data entry is performed and new historical information becomes available; which my download program adjusts to automatically. This is why I ‘preference’ all my blog posts with the word ‘Snapshot’.

    Regardless, I submit to my inferior ‘Solid Earth’ source as this “must” obviously be our difference. Nevertheless, I would like you to respond to our actual “agreements”: yes agreements; that sales have dramatically declined in Huntsville over the last 9-11 months and yet in the ‘Greater Huntsville Area’ prices have not only stabilized but are at this ‘current moment’ strengthening?

    Any comments?

    Reply
  6. Elizabeth Cooper

    Well …lol …after re-reading I think we may be discussing two different topics: you absorption rate inventory (i.e., months of supply) and me literal supply (i.e., simple units of listings (supply) on the market available for purchase).

    Oh Well …If this is the case, I guess I made my own point about statistics being all about ‘context’.

    Best Wishes …Chat with you next month,

    Beth

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s