Huntsville July 2009 Sales up, Inventory also climbing

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

Huntsville, North Alabama market was fairly strong in July coming in a bit ahead of June results. This pattern is showing some signs of normalcy as the sales levels for the last four months are tracking the 2004 levels with similar month to month fluctuations. July total dollar sales were $152,988,748, 3%, higher than last month’s $148,044,370, and 15% below last year’s level of $179,577,754 (Sect A  p.4).

Total unit sales increased from 853 in June to 880 in July, an increase of 27.

New sales increased from 173 homes last month to 185 this month, an increase of 12.

Used sales increased from 680 homes last month to 695 this month, an increase of 15 (Sect E  p.3).

A disturbing trend: while we have been reporting total inventory numbers as going down pretty much month after month, a close look at the data reveals that the opposite has been happening. This is due to the date sensitivity of how listings are recorded and when during the month they get renewed (call me if you want the details). For the last 6 months (and probably this month also when we look again next month) the used inventory level has been climbing. Looking at the prior 3 months of inventory figures they were all records. 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 18 months of inventory, and in some price ranges as much as 7 years of inventory.

New houses over $400,000 are over a year’s worth of inventory, and in some price ranges over six years of inventory. (E-1). There still remain 1,572 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 535 homes; we showed 68 homes sold,  (July) and 82 new single family housing permits issued (June), therefore  permits ran 1.2x sales. Amazingly, while I don’t normally track multifamily activity there were 25 permits issued for a total of 324 multifamily dwelling units in Huntsville city according to the Census department.

Total Active listings decreased by 6% this month at 8,297 compared to last month at 8,860 (Sect A p.4 and Sect E p.3). (Given the note above, I expect this will increase when reported next month.) New houses New listings ran 1.6 times the rate of sales (Sect B p.1). Active New listings decreased from 1,840 last month to 1,572 this month, down 268 (Sect E p.3). Active Used listings decreased from 7,020 last month to 6,725 this month, down 295 (Sect E p.3).

Given the high number of homes for sale (over 8,000), the BRAC realignment will not cure the market, particularly in light of other employment problems. What banks are funding construction?

Absorption for New homes remained at 11 months of inventory in July. This is a deterioration of 1 month from last year at this time (Sect E p.8). Absorption for Used homes was 12 months of inventory in July same as last month. This is a deterioration of 3 months from last year’s level at this time (Sect E  p.8).

Average Days on Market for Sold New houses was 127 days vs. 170 days last month, with Used at 113 vs. 124 last month. (Sect A p.18).

Average sales price for Sold New homes was $228,510 vs. $242,205 last month. (Sect A p.2)

Average sales price for Sold Used homes was $158,301 vs. $156,092 last month. (Sect A p.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.

It will be an interesting Fall season (and not just football), stay tuned!

TWB 8/15/09


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