Huntsville April 2009 Residential Real Estate Sales Lackluster


Huntsville/North Alabama Area MLS Observations Huntsville, Alabama Residential Real Estate Market April 2009:

Huntsville, North Alabama market had another poor sales month in April. This pattern is showing increased weakness in the overall market the sales levels are now below the 2004 levels which is lower than previously seen. April total dollar sales were $105,362,374, 1%, lower than last month’s $106,075,089, and 25% below last year’s level of $139,824,040.

April 2009 Huntsville Area Total Dollar Sales

April 2009 Huntsville Area Total Dollar Sales

Total unit sales decreased from 685 in March to 669 in April, a decrease of 16.

New sales decreased from 123 homes last month to 122 this month, a decrease of 1.

Used sales decreased from 562 homes last month to 547 this month, a decrease of 15 (Sect E Page 3).

Unfortunately the slight trend down in absolute numbers of used homes for sale seems to have stalled at a fairly high number. Used homes are 11 months of inventory in all price ranges, which is a bit of deterioration from last month. The inventory situation remains challenged in the higher price ranges. Used homes over $200,000 are now at over 16 months of inventory, and in some price ranges as much as 4 years of inventory. This situation has gotten somewhat worse over the last few months. New houses over $400,000 are over a year’s worth of inventory, and in some price ranges over three years of inventory. (Page E-1). There still remain 1,686 New homes for sale, slightly less than double what would have been normal prior to 2006 (See chart Page C-1). I have noted on the web site what seems to be a large number of housing permits issued, given the market conditions.

Total Active listings decreased by 4% this month at 8,099 compared to last month at 8,430 and 3% less than April 2008, 8,374(against the 25% reduction in sales)(Chart section A page 4 and Page E-3). New houses New listings ran almost 3 times the rate of sales (Section B Page 1).

Active New listings decreased from 1,866 last month to 1,686 this month, down 180 (Page E-3).

Active Used listings decreased from 6,564 last month to 6,413 this month, down 101 (Page E-3).

We believe that there is an increasing amount of “shadow inventory” in both the New and Used market places i.e.; houses held off the market for various reasons, but that really are for sale. This could result in higher spring new listings and inventories as these properties come to market.

As mentioned above, we provide a link to free census department data on our blog site. Look under data sources in the right column. The high number of building permits relative to sales and inventory is highlighted. It is unusual in any market to see months of supply for New houses exceeding Used supply. Given the high number of homes for sale (over 7,500), the BRAC realignment will not cure the market, particularly in light of other employment problems. I don’t get the continued new construction? What banks are funding construction?

Absorption for New homes remains at 11 months of inventory in April. This is still a deterioration of 1 month from last year at this time. See Section E page 8. Absorption for Used homes was 11 months of inventory in April same as last month. This is a deterioration of 3 months from last year’s level at this time see Section E pg 8.

Average Days on Market for Sold New houses was 130 days vs. 113 days last month, with Used at 121 vs. 122 last month. (See Section A Page 18).

Average sales price for Sold New homes was $216,110 vs. $230,988 last month. (Chart Sect A Page 2)

Average sales price for Sold Used homes was $144,419 vs. $138,191 last month. (Chart Sect A Page 2)

The mix of higher and lower priced homes is jumping around quite a bit so it’s hard to read too much into average prices. However it is worth noting that the average price 12 month moving averages are all pointing down.

TWB 5/15/09*All references to last month numbers are revised, to pick up late entries (made after our prior publication date) to the MLS system.

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One thought on “Huntsville April 2009 Residential Real Estate Sales Lackluster

  1. Keith B

    Tom,

    I’ve been following your RE Trends blog for almost a year or more, since my wife and I decided that out of 10 areas around the US we had been “inspecting” to move to, “north” Alabama (Huntsville primarily) finish a clear first. You are doing a sensational job reporting what is going on without interjecting the spin a lot of realtors and the media often put on up or down real estate news.

    Interesting situation on the trends both new and used homes in inventory, and particularly what are builders thinking with your report that new construction permits are still up. More so, what the heck are the banks, or whomever else, thinking funding more new construction with all that inventory on the books? Is there so much ‘loose’ money around Alabama, that the funding sources are desperate to spend it whipping a limping horse?

    This sounds a lot like the foolishness that went on in California for two years before the house of cards really imploded in ’06 and well known builders started filing for BK, taking banks and other funding sources with them. I’ve been here in CA off and on since 1972 – originally a farm kid from north-central Illinois. We can’t wait to get out, as so many others we know are doing as well for various more “right thinking” states.

    Where we are in south Orange County, many zip codes including ours, are finally showing an up-tick in home prices and sales as inventory has dried up. Nothing new is being built, because the funding sources are tighter than spandex and too many CA builder have gone BK or bailed from CA. Our value didn’t slide as bad as many other So Cal areas, yet our area still lost 25% of the high prices in 05. We wanted to move to N. AL in 07 – 08, but our prices were sliding, while yours were still going up.

    Are there any indications as to why the sudden slide in new and used homes in the northern half of Alabama and how long might it last? When we were in Huntsville and Birmingham last Sept., we kept hearing that there was still a shortage of available talent for the number of job opening in the tech oriented companies. Have those jobs dried up?

    Also, will this new over-building despite the excessive inventory likely cause a California style implosion? Something to worry about?

    Well we are nearly ready to run don’t walk out of CA for AL, as soon as my wife finds a Government or tech industry oriented job in Customs/C-TPAT/ Inventory Logistics Admin. We hope to have our home here listed in 30 days or so.

    Reply

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