Huntsville/North Alabama June ’09 Sales Not Too Bad

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

1st Half Total $ Sales Total Unit sales New Unit sales Used Unit sales
2008 888,461,742 5263 1166 4097
2009 649,986,157 3971 774 3197
% difference -27% -25% -34% -22%

The 1st Half numbers pretty much speak for themselves.

Huntsville, North Alabama market was fairly strong in June as is expected in the traditionally strongest sales month of the year. This pattern still shows continued weakness in the overall market as the sales levels for the last three months are below the 2004 levels. June total dollar sales were $139,611,384, 17%, higher than last month’s $119,033,523, and 22% below last year’s level of $178,948,964 (A  4).

Total unit sales increased from 715 in May to 804 in June, an increase of 89.

New sales increased from 136 homes last month to 150 this month, an increase of 14.

Used sales increased from 579 homes last month to 654 this month, an increase of 75 (E  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 12 months of inventory in all price ranges. The inventory situation remains challenged in the higher price ranges. Used homes over $200,000 are now at over 17 months of inventory, and in some price ranges as much as 4 years of inventory.

New houses over $400,000 are over a year’s worth of inventory, and in some price ranges over four years of inventory. (E-1). There still remain 1,593 New homes for sale, slightly less than double what would have been normal prior to 2006 (C-1). I have noted on the web site what seems to be a large number of housing permits issued, given the market conditions. To examine it a bit of detail: In Huntsville city for New homes, active inventory was 514 homes; we showed 51 homes sold, 89 new listings (June) and 82 new single family housing permits issued (May), So new listings ran 1.75x sales and permits 1.6x sales.

Total Active listings decreased by 6% this month at 8,309 compared to last month at 8,828 (A 4 and E-3). New houses New listings ran almost 2 times the rate of sales (B 1). Active New listings decreased from 1,918 last month to 1,593 this month, down 325 (Page E-3). Since there were only 145 new homes sold and 271 new listings, there was an unusual number of listing cancellations, and expirations (415!) which will probably come back to market; I noticed a large number of these for the top three builders in the area. Active Used listings decreased from 6,910 last month to 6,716 this month, down 194 (E-3).

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. What banks are funding construction?

Absorption for New homes improved a bit at 11 months of inventory in June. This is a deterioration of 1 month from last year at this time. See Section E page 8. Absorption for Used homes was 12 months of inventory in June same as last month. This is a deterioration of 3 months from last year’s level at this time (E  8).

Average Days on Market for Sold New houses was 170 days vs. 139 days last month, with Used at 124 vs. 118 last month. (See Section A Page 18). Contrary to some belief, this increase is a good sign, since buyers are buying homes that have been on the market for a long time scooping up some of the older listings.

Average sales price for Sold New homes was $246,642 vs. $230,984 last month. (A 2)

Average sales price for Sold Used homes was $156,903 vs. $151,329 last month. (A 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 7/12/09


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