September Huntsville Sales Pretty Good, Inventory Still High

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

Huntsville, North Alabama market performed substantially better than expected in September coming in 2% below August results. This is the best September to August comparison in ten years. This is about the same as September 2004. It is still highly likely given the strong seasonal trends that sales will continue to deteriorate for the remainder of the year. September total dollar sales were $120,782,817, compared with $123,234,552 in August, and 16% below last year’s level of $143,384,035 (Sect A  p.4).

Total unit sales increased from 750 in August to 748 in September, an increase of 2.

New sales increased from 143 homes last month to 151 this month, an increase of 8.

Used sales decreased from 605 homes last month to 599 this month, a decrease of 6 (Sect E  p.3).

A disturbing trend: while we have been reporting total inventory numbers as going down 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 8 months (and probably this month also when we look again next month), the used inventory level has been climbing. For the last 5 months inventory has been setting records. Used homes are 12.4 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 19 months of inventory, and in some price ranges as much as 7 years of inventory.

New houses are at 11 months of inventory, and homes priced greater than $400,000 are over a year’s worth of inventory, and in some price ranges over six years of inventory.

September 2009 Huntsville/North Alabama Absorption and Inventory

September 2009 Huntsville/North Alabama Absorption and Inventory

I have noted on the web site what seems to be a large number of housing permits issued, given the market conditions. There were 96 new single family housing permits issued (August) down from 105 in the prior month in Huntsville city according to the Census department. This permit level is still above the sales level for the comparable area.

Total Active listings decreased by 8% this month at 8,365 compared to last month at 9,088 (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 1.7 times the rate of sales (Sect B p.1). Active New listings decreased from 1,864 last month to 1,528 this month, down 336 (Sect E p.3). Active Used listings decreased from 7,224 last month to 6,837 this month, down 387 (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 September. This is a deterioration of .5 month from last year at this time (Sect E p.8). Absorption for Used homes was 12 months of inventory in September 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 155 days vs. 89 days last month, with Used at 123 vs. 121 last month. (Sect A p.18).  As a side note the increase in DOM for new home means that some of the “old” inventory is moving, so that is actually good news.

Average sales price for Sold New homes was $235,373 vs. $239,157 last month. (Sect A p.2)

Average sales price for Sold Used homes was $142,306 vs. $147,165 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 is an interesting Fall season, (and not just football), stay tuned!

TWB 10/11/09


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