Birmingham Area MLS* Monthly Observations for April 2009
April sales were so-so. Sales increased slightly from March, and this is not always the seasonal case. Dollar sales were up 5.5% to $168,031,197 in April vs. $159,247,024 in March. The first thing I look at every month is how the twelve month moving average line on the total dollar sales chart is looking. I began sounding warning signals when it started leveling out back in late 2006, and I’ll start feeling positive when it stops pointing down. It has to level off before it can point back up!
Total unit sales improved by 6% to 1,096 in April from 1,034 in March, an increase of 62. This is a 22% decline from April 2008 (1,412). New sales deteriorated 5% to 177 homes this month from 186 in March; a drop of 9 units. Used sales improved 8% to 919 homes in April from 848 last month, an increase of 71 (sect E page 3).
A bit of good news: total inventory is down 20% from last year at this time at 12,757 vs. 15,910. Contrast this 20% reduction in inventory with the 22% reduction in sales on a comparable month basis. This comparable drop is somewhat promising! Active New listings decreased to 1.970 in April from 2,335 in March, a decline of 365 units (E-3). While it seems that there are a low number of housing permits in the area (97 in March vs. 61 in the prior month for Jefferson County) the continued increase is worrisome. New inventory still has to contract to 1,800 or to reach more normal pre-2004 levels, and in light of the heavy used inventory, and low sales levels even that would be high (See the chart on page C.1, and table on page E-3).
Absorption rates for New homes improved to 8 months from 9 months of inventory last month, about even with 8 months last year at this time (Section E page 3). New house inventories in the higher price ranges (above $500,000) remain excessive at over a year, and are continuing to see poor sales.
April 2009 shows 10,787 Used active listings (page E-3). Absorption for Used homes had been holding steady at 12 months of supply, level from June to August of 2008 and had been showing modest improvement which has now reversed, and sits at 11 months of inventory. This is about the same as last year’s level at this time (See section E page 3).
The primary reduction in used homes for sale is occurring in areas such as 170 North Birmingham/Norwood, 160 Eastlake, 130 Centerpoint; while 140 Trussville, and 200 Mountain Brook (a new record), 230 Homewood were all up. I suspect some sellers in the lower price ranges may simply giving up trying to sell? The market for houses requiring “Jumbo” loans remains challenged. While foreclosures have impacted average prices, a bigger factor is the dramatic reduction in the number of higher priced homes sold.
Birmingham area Average Days on Market for New houses increased to 187 days as compared to 179 days last month. Used houses decreased to 108 from 117 in March (sec A page 18).
Average sales price for Sold New homes increased to $214,791 from $210,585 last month (Chart sect A p2). Average sales prices for Sold Used homes decreased to $141,472 from $141,602 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. It’s hard to read too much into average prices with the absence of higher end sales.
*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.