Huntsville/North Alabama Area MLS, Observations Huntsville, Alabama Residential Real Estate Market August 2008: This summary from our monthly 91 page report. see http://tombrander.com for details
August total dollar sales in the Huntsville, Alabama area were $145,598,996, 18% lower than last month’s $178,250,054, and 32% below last year’s level (Section A Page 4). This drop is largely seasonal but somewhat worse than might be expected. See my commentary at “Caution Rough Times Ahead”. 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 reality however is that this “prosperity” is largely confined to the lower priced sector, under $200,000. 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 falling levels. We expect to see prices come down in the very slow market. The fact that average square foot prices have not moved yet is probably more of a statistical abnormality, in part exaggerated by the much larger number of lower priced houses being in the sales statistics. Further, people not coming off prices yet. With the large overhang of inventory in the upper price ranges it is only a matter of time, not much longer I suspect. This seems to be the case pretty much across the area. This also explains the lack of movement in the average house price, high priced houses simply aren’t selling very well.
We do see continuing inventory build-up, the used market has showed a very consistent increase in months of inventory now at the highest level, 9.3 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 $400,000, used houses generally show over 2 years of inventory. Absolute numbers of active listing have been moderating slightly for new this month also shows a slight decline from last months record number of active used houses, (see below). There are 7% more houses active than in August 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 build up of existing housing supply will continue to impact the new housing market.
Total active listings decreased slightly from 8,597 in July* to 8,325 in August a decrease of 272. (See Page E-3). There were 412 new house new listings (an increase from 326 last month), while sales of new houses decreased to 141 for the month from 201 in July. New houses new listings ran 2.9 times the rate of sales (Section B Page 1).
Active New listings decreased from 2,075 last month to 1,934 this month, a decrease of 141 (Page E-3).
Active Used listings decreased from 6,522 last month to 6,391 this month, a decrease of 131 (Page E-3).
Total unit sales deteriorated from 957 in July to 827 in August a decrease of 130 units.
New sales deteriorated from 201 homes last month to 141 this month, a decrease of 60.
Used sales deteriorated from 756 homes last month to 686 this month, a decrease of 70 (Sect E Page 3).
Absorption for new homes was 9.7 months of inventory in August vs. 9.8 last month. see Section E page 8. Absorption for used homes was 9.3 months of inventory in August vs. 9.2 last month. This is a deterioration of 2.8 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 104 days vs. 156 days last month, with used at 103 vs. 102 last month. (See Section A Page 18).
Average sales price for sold new homes was $260,431 vs. $254,763 last month. (Chart Sect A Page 2)
Average sales price for sold used homes was $156,897 vs. $160,710 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.