Huntsville/North Alabama Area MLS Observations Huntsville, Alabama Residential Real Estate Market October 2009:
For a second month in a row, the Huntsville, North Alabama market performed substantially better than expected. In October sales were 13% above September results. This is the best October to September comparison in ten years. October total dollar sales were $138,995,936, compared with $123,448,487 in September, and 19% above last year’s level of $116,676,494 (Sect A p.4).
Total unit sales increased from 766 in September to 865 in October, an increase of 99.
New sales increased from 156 homes last month to 178 this month, an increase of 22.
Used sales increased from 610 homes last month to 687 this month, an increase of 77 (Sect E p.3).
While the sales trend has been very encouraging, a disturbing trend is evident. 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 9 months (and probably this month also when we look again next month), the used inventory level has been climbing. For the last 6 months inventory has been setting 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 are at 10 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. (E-1). I have noted on the web site what seems to be a large number of housing permits issued, given the market conditions. There were 70 new single family housing permits issued (September) down from 96 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 10% this month at 8,081 compared to last month at 8.943 (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 1.3 times the rate of sales (Sect B p.1). Active New listings decreased from 1,786 last month to 1,475 this month, down 311 (Sect E p.3). Active Used listings decreased from 7,175 last month to 6,606 this month, down 569 (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 was at 10 months of inventory in October. This is roughly the same as last year at this time (Sect E p.8). Absorption for Used homes was 12 months of inventory in October an improvement of 1 from 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 88 days vs. 155 days last month, with Used at 114 vs. 123 last month. (Sect A p.18).
Average sales price for Sold New homes was $223,144 vs. $234,072 last month. (Sect A p.2)
Average sales price for Sold Used homes was $144,507 vs. $142,513 last month. (Sect A p.2)
The twelve month moving average line of prices for both new and used homes has a decidedly negative slope, indicating that prices are truly coming down. 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.