Birmingham Area MLS* Monthly Observations for July 2009
Sales decreased from June, which always happens and the decline was fairly “normal”. Dollar sales were down 8.5% to $217,833,975 in July vs. $237,970,680 in June. That is off 21.6% from last July ($277,674,298). The next few months will be telling as we enter into the weaker sales period. (Next month has a 50-50 chance of being up from July.) The first thing I look at every month is how the twelve month moving average line on the total dollar sales chart is trending. I’ll start feeling positive when it stops pointing down which it is not yet doing.
Total unit sales declined by 6% to 1,244 in July from 1,323 in June, a decrease of 79. This is a 16% decline from July 2008 (1,475). New sales dropped 19% to 186 homes this month from 229 in June, a drop of 43 units. Used sales dropped 3% to 1058 homes in July from 1094 last month, a decrease of 36 (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. For this month; total inventory is down 19% from last year at this time at 12,716 vs. 15,517. Active New listings decreased to 1,762 in July from 2,154 in June, a decline of 392 units (Sect E p.3). It seems that builders are pulling back, evidenced by low numbers of housing permits in the area (73 in June vs. 61 in the prior month for Jefferson County). This moderation is a good sign. The trend is similar in Shelby County (See the web site for details). New inventory is reaching the 1,800 or so level which reflects more normal pre-2004 levels. In light of the heavy and increasing Used inventory, and low sales levels, I would not be in a rush to build! (Sect C p.1, and Sect E p.3).
Absorption rates for New homes improved to 9 months from 10 months of inventory last month, and is about even with 8 months last year at this time (Sect E p.3). New house inventories in the higher price ranges (above $500,000) remain excessive at over a year.
July 2009 shows 10,954 Used active listings (Sect E p.3). Absorption for Used homes is holding steady at 12 months of supply. This is about the same as last year’s level at this time (Sect E p.3). As with the New home market, the higher price ranges are doing poorly.
The primary reduction in Used homes for sale is occurring in areas 170 North Birmingham/Norwood, 160 Eastlake, and 130 Centerpoint, and indeed some of these areas are beginning to approach normal levels of inventory, while 140 Trussville, 200 Mountain Brook, and 230 Homewood are all up. The market for houses requiring “Jumbo” loans remains challenged.
Birmingham area Average Days on Market for New houses was unchanged at 201 days as compared to 202 days last month. One way to look at DOM is that older inventory is beginning to move, so increases in this number are not all bad! Used houses decreased to 109 from 112 in June (Sect A p.18).
Average sales price for Sold New homes increased to $234,277 from $229,326 last month (Sect A p2). Average sales prices for Sold Used homes decreased to $164,705 from $169,520 last month (Sect A p2). The twelve month moving average price line on all categories of houses, New, Used, and Total shows a substantial downward slope (Sect A p2). It’s hard to read too much into average prices with the continued absence of higher end sales.
It will be an interesting Fall and not just football. Stay tuned!