Birmingham Area MLS* Monthly Observations for December 2009
A close examination of section “C” shows that of the 47 MLS areas quite a number of them are beginning to show “normal” or even below normal inventory levels. It suggests that there might be some opportunity opening for low end builders (location, location at work again). Additionally, for the 1st time in a long time, this report has increased its page count by three, reflecting increased activity.
December residential sales were down from November. Some of this was due to the rush to take advantage of the 1st time homeowners’ credit which was to have expired in November, and the subsequent dip in demand. Dollar sales were down 12% to $159,061,250 in December vs. $180,187,704 in November. That is off 2% from last December ($163,021,365). Unfortunately, January has always been worse than December so the outlook for next month is not too bright. The twelve month moving average line on the total dollar sales chart is still trending up slightly. This month we got a bit of a wobble however. The upwards slope remains more pronounced on the “Number of Homes Sold” graph. It is still a bit early for outright optimism but…..
Total unit sales declined by 17% to 913 in December from 1,102 in November, a decrease of 189. This is a 7% reduction from December 2009 (984). New sales declined 32% to 159 homes this month from 233 in November, a deterioration of 74 units. Used sales dropped 13% to 754 homes in December from 869 last month, a decrease of 115 (Sect E p.3).
We are seeing fairly consistent signs of inventory reduction over a several month period. For this month total inventory is down 13% from last year at this time at 11,403 vs. 13,128. Active New listings decreased to 1,392 in December from 1,704 in November, a decline of 312 units (Sect E p.3). In November it appears that builders upped the permits. The number of housing permits has decreased slightly in the area (55 in November vs. 76 in the prior month for Jefferson County). Shelby County permits jumped slightly (See the web site for details). New inventory is now below the 1,800 level which reflects more normal pre-2004 levels, which is still a uncomfortable 7.5 months supply at the reduced sale pace. 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 rate for New homes improved to 7.5 months of inventory, and is better than 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 improved notably.
December 2009 shows 10,011 Used Active listings (Sect E p.3). Absorption for Used homes is leveling out now at 11 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.
The market for houses requiring “Jumbo” loans remains challenged, and many sellers are removing their homes as Active listings.
Birmingham area Average Days on Market for New houses increased to 170 days as compared to 157 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 remained at 111 from 111 in November (Sect A p.18).
Average sales price for Sold New homes increased to $224,599 from $208,356 last month (Sect A p2). Average sales prices for Sold Used homes increased to $163,594 from $151,485 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.