Birmingham Area MLS* Monthly Observations for January 2010
January residential sales were down 34% from December, to $106,419,510 in January vs. $161,634,200 in December. That is off 1% from last January ($107,267,676), and is also the lowest dollar sales since 2001. It is the largest percentage decline December to January other than last year. The good news is coming! February has always, for ten years at least, been better than January, so the outlook for sales next month is good. The twelve month moving average line on the total dollar sales chart is still trending up slightly. 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 25% to 694 in January from 930 in December, a decrease of 236. This is a 7% reduction from January 2009 (750). New sales declined 33% to 109 homes this month from 162 in December, a deterioration of 53 units. Used sales dropped 23% to 585 homes in January from 768 last month, a decrease of 183 (Sect E p.3).
We saw a disturbing, but somewhat seasonally normal, inventory increase in Used homes reversing the pattern of the last 9 months. For this month total inventory is down 9% from last year at this time at 11,992 vs. 13,173. Active New listings decreased to 1,442 in January from 1,584 in December, a decline of 142 units (Sect E p.3). New listings for new homes more than doubled over last month to 337 from 154. In December it appears that builders reduced permits. The number of housing permits has decreased slightly in the area (45 in December vs. 55 in the prior month for Jefferson County). Shelby County also declined 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 an uncomfortable 7.8 months supply at the reduced sales 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 showed some signs of stabilizing, but this may just be a seasonal phenomena. Absorption rate for New homes improved to 7.8 months of inventory, and is better than 8.5 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.
January 2009 shows 10,550 Used Active listings (Sect E p.3). Absorption for Used homes is leveling out now at 11.5 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.
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 208 days as compared to 170 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 101 from 111 in December (Sect A p.18).
Average sales price for Sold New homes increased to $227,548 from $225,143 last month (Sect A p2). Average sales prices for Sold Used homes decreased to $139,516 from $162,970 last month (Sect A p2). The twelve month moving average price line for All and Used homes has begun to curve upward, but the New home average prices continue to show a downward slope (Sect A p2). It’s hard to read too much into average prices with the continued absence of higher end sales.