FDIC: Housing slowdown wallops Alabama economy – Birmingham Business Journal:


To expound on this article from the Business Journal:

What I was trying to discuss was the reduction in construction, where that approximate reduction in sales (on a 12 month moving average basis down 62%+ peak to throught and we have seen a 35% reduction in new home inventory from 3690 in 6/1/07 to 2488 in November, I felt somewhat safe in saying that new home construction was off at least 80% ,62% reduction in sales and a 35% reduction in inventory… 80% reduction in construction seems like a conservative number regardless of what the permit data is saying. Best, Tom

FDIC: Housing slowdown wallops Alabama economy – Birmingham Business Journal:.

The housing slump that torpedoed growth in neighboring states is starting to take its toll on Alabama’s economic health, according to the latest Federal Deposit Insurance Corp. report.

Single-family home permits across the state dipped 40.1 percent in the third quarter ended Sept. 30, while multifamily permits plummeted 69.7 percent. During the third quarter of 2007, single-family permits declined 26.5 percent and multifamily permits were down 25.5 percent, FDIC data shows.

Tom Brander, publisher of the Rudulph/Brander Monthly Birmingham Area Real Estate Report, said new home sales dropped about 80 percent, so it only makes sense for building permits to decline along with those numbers.

Furthermore, the amount of inventory on the market is above normal and in order to decrease inventory, homes already listed on the market must be sold before any new homes are added to the stockpile, he said.

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2 thoughts on “FDIC: Housing slowdown wallops Alabama economy – Birmingham Business Journal:

  1. Zack Bryce

    Interesting, but even if there is a 40+% drop in new construction permits and especially a “35% reduction in new home inventory”, and an assumption of an equal drop in used home inventory, wouldn’t that still indicate not much if any drop in home prices since I assume that an influx of new buyers due to base realignments and other factors bringing in new people into Northern Alabama haven’t changed appreciably?

    Reply
    1. tbrander Post author

      Uh,, I don’t think so, this article was referring to the Birmingham market statistics, and besides had a few errors, The trend in fact is not that much different in North Alabama however. The key fact is that sales are slowing (see link!)in the Huntsville area, down 31% in November alone after a lousy October, and months of inventory are growing, particularly for new houses. In North Alabama, there is also growing used inventory, and I suspect more to come It is inevitable that there will be some accelerated price adjustment, IMHO.
      Best wishes for the New Year and thanks for commenting.
      Tom

      Reply

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