Huntsville/ North Alabama Sales off 26% From Last Month, Ahead of Last Year

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

Sales dropped a disappointing 26% in December ($102,470,334) vs. November ($139,302,064). This was still 17% higher than last year ($87,957,647). Much of the decline is due to the rush to close transactions in November prior to the expiration of the first time homebuyers’ tax credit. The twelve month moving average line on the total dollar sales chart remains on a decided turn upwards.

Total unit sales decreased from 867 in November to 657 in December, a decrease of 210.

New sales decreased from 213 homes last month to 144 this month, a decrease of 69.

Used sales decreased from 654 homes last month to 513 this month, a decrease of 141 (Sect E  p.3).

While the sales trend is encouraging, a disturbing trend in inventory was evident. Even though we have been reporting total inventory numbers as going down month after month, a close look at the data reveals that the opposite was 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). From January 09 through September 09 Used inventory levels have been setting records. It has been somewhat better for the last three months. Used homes are 11 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 15 months of inventory, and in some price ranges as much as 7 years of inventory. Prices continue to be under pressure.

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 94 new single family housing permits issued (November), up from 63 in the prior month in Huntsville City, according to the Census department. This permit level is above the sales level for the comparable area.

Total Active listings decreased by 7% this month at 7,895, compared to last month at 8,477 (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 1.6 times the rate of sales (Sect B p.1). Active New listings decreased from 1,652 last month to 1,469 this month, down 183 (Sect E p.3). Active Used listings decreased from 6,825 last month to 6,246 this month, down 579 (Sect E p.3).

Given the high number of homes for sale (over 7,500), 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 December. This is better than 11 months, last year at this time (Sect E p.8). Absorption for Used homes was 11 months of inventory in December an improvement of 1 from last month. This is a deterioration of 1 month from last year’s level at this time (Sect E  p.8).

Average Days on Market for Sold New houses was 119 days vs. 101 days last month, with Used at 119 vs. 110 last month. (Sect A p.18).

Average sales price for Sold New homes was $235,392 vs. $219,538 last month. (Sect A p.2)

Average sales price for Sold Used homes was $133,672 vs. $141,499 last month. (Sect A p.2)

The twelve month moving average line of prices for new homes has a decidedly negative slope, indicating that prices are truly coming down. Used prices seem to have leveled off a bit, which is encouraging. 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.

TWB 1/10/10


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