Madison City Limits: August 2008 Current Inventory (Part 1)

This discussion assumes that you have read the overall summary for the month, located here.

This is real August 2008 data with some of the detail from the 106 page Huntsville area monthly report.

This is the Huntsville area “05 Madison City Limits”, which has the most combined new and resale (used) home sales over the last 12 months, out of approximately 37 areas we cover in the Huntsville area report.

Over the last 12 months the area has had 804 total house sales.

Huntsville Area 05 Madison City Limits Summary Aug 08

Huntsville Area 05 Madison City Limits Summary Aug 08 (Click to enlarge)

There were 499 active listings in August which is 7.5 months of inventory.

Inventory = the total of the New and Used active: divided by the total sold last 12 months times 12: in this example: it is 499/ 804 and * 12= 7.5.

The table shows the same inventory calculation for Used is 7.0 months of inventory and New is 9.2 months.

In the industry a rule of thumb is that 6 months is considered “normal”. Both New and Used housing stocks are above healthy levels. It is very unusual to see greater months of supply for New than for Used.

  • Weaker segments, where inventory is 10 months or more, are highlighted in yellow.
  • The healthiest area would appear to be in the $200,000-$299,999 range. with 8 months of Used inventory and 5 of New, still not great, but better.

Our “all area” summary table (not reproduced here) for the entire MLS shows there is 13.4 used and 9.7 new months of supply in this price range. So even this price range has lots of competition from fairly nearby areas. It’s clear that the somewhat better overall average months of inventory number for the area is heavily influenced by the high number of lower priced houses in the averages, 254 used in the $100,000-$199,999 range etc.


  • It amazes me that some banks and developers rely on quarterly data (or older) and do not do analysis on how the resale market is affecting them.
  • Sellers in the higher price ranges need to have an aggressive marketing plan.
  • It is important to note that the absorption figure is based on the last 12 months sales, in a declining market it tends to be too optimistic.
  • My comments in the main monthly summary point out the very steep downturn in total dollar sales in the Huntsville area.
  • Now we know here we are, Let’s look at the trends. (See part 2)

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