Home construction outpaces home sales


We were pleased to work with Gina Hannah on this story:
Huntsville Times (click for whole story) Real estate news and notes from the week:

Here’s where both the local Realtor’s association and Brander agree: The bulk of current sales are for lower-priced, used homes. Indeed, in Madison County alone, more than 85 percent of the homes sold in May were under $300,000, as more first-time buyers take advantage of the tax credit to buy homes in their price range. Higher-priced homes typically are purchased by homeowners who are “moving up” into a larger, more expensive home and have equity in their first home.

Monday’s report on home sales was good news to local Realtors, who saw a 26 percent jump in home sales between April and May. One month does not a trend make, but any uptick is good news in a national market that continues to languish.

One real estate expert agrees the Huntsville market is faring better than others, but he also offers a cautionary note.

Tom Brander, a principal in Birmingham-based Rudulph/Brander Real Estate Statistical Reports (tombrander.com), collects data from multiple-listing services throughout Alabama, including the Huntsville-area MLS, which includes eight counties in North Alabama and a small part of southern central Tennessee. Rudulph/Brander supplies market data to the banking and building industries.

Brander says he’s surprised by the level of new home construction going on in the market, particularly in Madison County, when inventory levels remain high. According to the Huntsville Area Association of Realtors, 111 new homes were sold in Madison County last month; builders pulled permits for 187 new homes (reported by the Huntsville/Madison County Builders Association), making the construction rate for new homes about 1.7 times that of the sales rate.

Brander’s numbers differ slightly: He reports 82 new homes sold in Madison County, making the construction rate about 2.3 times the sales rate.

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2 thoughts on “Home construction outpaces home sales

  1. Kevin

    Greetings Tom,

    I have enjoyed reading your blog and market summaries over the last few months. I am relocating to the Huntsville area this summer and have been doing some market research on the web and have tbander.wordpress, movetohuntsville, huntsville-realestate, and the Huntsville Times websites very helpful.

    However the various websites seem to have different numbers even when they state they are pulling the same geographic area and from the same NALMLS source but the numbers don\’t jive. I have requested some clarification from the 4 websites I am frequenting and wanted to include a request to you as well.

    Any idea what the explanation may be as to why the HAAR reports published in the Huntsville times don\’t match the numbers on my other 3 websites of interest?

    Just wondering,
    Kevin

    Reply
    1. tbrander Post author

      One of the biggest problems is real estate reporting is data comparability. Most of the sites for various reasons use different sources, (we use MLS) and different geographies, some use tax areas some use MLS areas (which is what we do) some use zip codes some use townships none of the geographies line up or have common boarders. The precision of the boarders and the data itself may also be an issue. another complication is time frame.. I can’t go into all the issues here.. it gets sort of technical. We recalculate ll of our data every month so, when an agent reports a sale after the month-end that occurred in the prior month, we correctly capture and report it (in the right month), a similar thing happens with active inventory with agents often “renewing” expired listings late in the month following, again we recalculate the active dates for the house in question, since presumably the poor folks were still trying to sell it! It was competing for sales. For this reason if you compare my last month report with this the sales and inventory numbers vary for the prior month. Most services do not bother, they report that data and leave it at that. Sometimes it is more meaningful than others. I think that in general most services use a fairly constant method so we each report almost identical % changes but the gross numbers may vary and certainly one cannot directly compare the gross numbers across services easily.
      I can assure you that our numbers are very consistently calculated and obtained as well as historically adjusted for late (and sometimes retroactive) reporting by agents.

      Reply

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