Signs Market Improving? Birmingham November 2009

Birmingham Area MLS* Monthly Observations for November 2009

November residential sales were down from October which is normally one of the slowest months of the year. Dollar sales were down 3% to $170,448,821 in November vs. $175,508,780 in October. That is up 32% from last November ($128,961,662), which was one of the 2 worst months in 10 years. Next month should be better as people have the “normal” desire to close transactions before the New Year. It seems that the 1st time homeowners’ credit is having a positive effect. The first thing I look at every month is how the twelve month moving average line on the total dollar sales chart is trending. This month we are beginning to see signs of an upwards slope. The upwards slope is even more pronounced on the “Number of Homes Sold” graph. It is a bit early for outright optimism but…..

November 2009 Birmingham Sales

November 2009 Birmingham Sales (click for larger)

Total unit sales declined by 10% to 1,045 in November from 1,156 in October, a decrease of 111. This is a 32% improvement from November 2008 (793). New sales improved 14% to 216 homes this month from 189 in October, an improvement of 27 units. Used sales dropped 14% to 829 homes in November from 967 last month, a decrease of 138 (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). This situation is modestly better this month. For this month total inventory is down 14% from last year at this time at 12,146 vs. 14,191. Active New listings decreased to 1,503 in November from 1,756 in October, a decline of 253 units (Sect E p.3).  In October it appears that builders upped the permits. The number of housing permits has increased slightly in the area (76 in October vs. 54 in the prior month for Jefferson County). Shelby County permits jumped slightly (See the web site for details). New inventory is going below the 1,800 level which reflects more normal pre-2004 levels. However, in light of the heavy Used inventory, and low sales levels, I would not be in a rush to build! (Sect C p.1, (compare it to last month) and Sect E p.3).

For both New and Used homes the months of inventory has been steadily rising (excluding the current and last month for the reasons cited above). Absorption rates for New homes improved to 8 months of inventory, and is about even with 9 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.

November 2009 shows 10,643 Used active listings (Sect E p.3). Absorption for Used homes is slowly climbing now 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 and deteriorating somewhat.

The market for houses requiring “Jumbo” loans remains challenged, and sellers are removing their homes as active listings.

Birmingham area Average Days on Market for New houses decreased to 157 days as compared to 183 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 increased to 111 from 78 in October (Sect A p.18).

Average sales price for Sold New homes increased to $208,979 from $200,667 last month (Sect A p2). Average sales prices for Sold Used homes increased to $151,157 from $142,278 last month (Sect A p2). The twelve month moving average price line for used homes has flattened out, but the New, and Total continues to 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.

TWB 12/13/09


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