Birmingham Area MLS* Monthly Observations for September 2009
September residential sales were surprisingly good and about equal to August. Normally, there is a pronounced decline from August to September. Dollar sales were down .7% to $184,140,031 in September vs. $185,505,105 in August. That is off 26% from last September ($250,547,162). We are almost certain to see three more months of declining sales, just based on normal seasonality, but it seems that the 1st time homeowners credit is having a positive effect. How things will unfold from here is a real mystery to me. 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 has not happened.
Total unit sales improved by 15.5% to 1,124 in September from 1,108 in August, an increase of 16. This is a 23% decline from September 2008 (1,452). New sales improved 24% to 211 homes this month from 170 in August, a jump of 41 units. Used sales dropped 3% to 913 homes in September from 938 last month, a decrease of 25 (Sect E p.3).
A disturbing trend is that 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 8 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 15% from last year at this time at 12,595 vs. 14,831. Active New listings decreased to 1,594 in September from 1,973 in August, a decline of 379 units (Sect E p.3). In August it appears that builders cut back on permits. The number of housing permits has shrunk a bit in the area (66 in August vs. 132 in the prior month for Jefferson County). 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. However, 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).
For both new and used homes the months of inventory has been steadily rising (excluding the current month for the reasons cited above). Absorption rates for New homes remained at 9 months of inventory, 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 and that situation has not improved.
September 2009 shows 11,001 Used active listings (Sect E p.3). Absorption for Used homes is slowly climbing now at 12.5 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 and deteriorating somewhat.
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 and if anything is getting worse.
Birmingham area Average Days on Market for New houses was quite a bit lower at 143 days as compared to 193 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 98 from 102 in August (Sect A p.18).
Average sales price for Sold New homes decreased to $230,251 from $230,601 last month (Sect A p2). Average sales prices for Sold Used homes decreased to $148,474 from $155,973 last month (Sect A p2). The twelve month moving average price line for 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 is an interesting Fall and not just football. Stay tuned!