Birmingham Area MLS* Monthly Observations for February 2009
February is normally the beginning of a sustained seasonal increase in sales. It certainly got off to a reasonable start once again this year. We saw a real pick up in February. Dollar sales were up 36% to $141,945,250 in February vs. $104,321,607 in January. While this is a 30% decrease from February last year, it contrasts very favorably with 47% decline year to year reported for January last month. Those who have been reading this report for a while know that I have been reporting some pretty awful numbers. While I would not herald this month as the bottom there are some hopeful signs. I hope I’m not going to look foolish!
Total unit sales improved 22% to 890 in February from 729 in January, an increase of 161, this is a 26% decline from February 2008 (1,203). New sales jumped 26% to 152 homes this month from 121 in January; an improvement of 31 units. Used sales jumped 21% to 587 homes in February from 766 last month, an increase of 130 (sect E page 3).
Continuing on the good news theme is that total inventory is down 16% from last year at this time at 12,297 vs. 14,616. Active New listings decreased to 2,119 in February from 2,476 in January, a decline of 357 units (E-3). This is down 44% from a peak of 3,819 in September 2007*. In addition, the low number of housing permits in the area (38 in January for Jefferson County) is also a very positive sign. Inventory still has to contract to 1,800 or to reach more normal pre 2004 levels (See the chart on page C.1, and table on page E-3).
Absorption rates for New homes improved to 8.1 months from 9 months of inventory last month, about even with 7.8 months last year at this time (Section E page 3). This number is heavily weighted by the 870 new homes in the $100,000-$200,000 price range representing 41% of all new homes for sale and having only 6.7 months of inventory. New house inventories in the higher price ranges (above $600,000) remain excessive, at over a year.
June 2008 set a record of 12,538 Used homes for sale. February 2009 shows 10,178 Used active listings (page E-3). Absorption for Used homes had been holding steady at 11.8 months of supply, level from June to August of 2008 but has begun to show a modest but fairly consistent reduction to 10.6 months of inventory in February. This is a .9 month increase from last year’s level at this time (See section E page 3).
This month I looked at number of the areas and was struck that the primary reduction in used homes for sale has occurred in the areas such as 170 North Birmingham/Norwood, 160 Eastlake, 130 Centerpoint, while 140 Trussville, and 200 Mountain Brook, 230 Homewood were all up. Don’t know why, except that lower priced homes are selling better than higher. The market for houses requiring “Jumbo” loans remains challenged. While foreclosures have impacted average prices, a bigger impact is the dramatic sales reduction in higher priced homes.
Birmingham area Average Days on Market for New houses increased to 178 days as compared to 147 days last month. Used houses increased to 119 from 104 in January (sec A page 18). This is good news as some of the longer Days On Market houses are selling which is bringing the average up.
Average sales price for Sold New homes was virtually unchanged at $225,427 from $225,463 last month (Chart sect A p2). Average sales prices for Sold Used homes increased to $145,908 from $126,711 last month (Chart sect A p2). Note that the twelve month moving average line on all categories of houses, New, Used, and total is now showing a very substantial downward slope (chart section a-2) indicating that sellers are at last showing flexibility on pricing. Used house average prices recovered this month, reflecting a more normal market.
*Caution!: All references to last month (and earlier) numbers show revisions. Each month we pick up late entries (i.e. ones made after our prior publication date) to the MLS system. Note that our totals are higher than what the MLS board reports because they apparently omit some areas which are in the MLS system but not in the immediate Birmingham area. We report everything in the system. Since both use consistent methods the % change or reported trend is almost always within a % or 2.