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