Birmingham Area MLS* Monthly Observations for March 2010
Spring is here! After what has been an excessive cold spell, sales in March were $177,375,765 up 55.3% from February at $114,202,675. This is an improvement of 8.9% from last March ($162,921,824). We have not seen this sort of month to month gain since the boom years of 2004-2007. As predicted, last month we did get an expected seasonal increase. We expect the outlook for sales next month to trend up. The twelve month moving average line of total dollar sales chart again seems to be fairly “flat”. This is a sign of the market beginning to find its footing. All is not rosy however, as explained below.
Total unit sales improved by 46% to 1,185 in March from 810 in February, an increase of 375. This is a 12% improvement from March 2009 (1,059). New sales improved 97%! to 207 homes this month from 105 in February, an increase of 102 units. Used sales improved 39% to 978 homes in March from 705 last month, an increase of 273 (Sect E p.3).
A somewhat larger than normal inventory increase in both New and Used homes is underway. For this month total inventory is down 2% from last year at this time at 13,077 vs. 13,355. Active New listings decreased to 1,389 in March from 1,642 in February, a decline of 253 units (Sect E p.3). In February it appears that builders increased permits. The number of housing permits has decreased slightly in the area (37 in February vs. 51 in the prior month for Jefferson County). Shelby County increased very 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 7.6 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). It is somewhat distressing that a number of more affluent areas are getting a lot of new listings. Homewood, Area 230, is the most dramatic example, with used inventory at a new all-time high of 379 Used homes, a 14 month supply.
For both New and Used homes the months of inventory has begun to creep up which is a worry. Absorption rate for New homes improved to 7.6 months of inventory, and is better than 8.7 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 is getting worse as new listings come on, and sales continue to be sluggish.
March 2010 shows 11,688 Used Active listings (Sect E p.3). Absorption for Used homes is at 12.7 months of supply. This is worse than the 11.8 months of supply last year at this time (Sect E p.3). The higher price ranges are doing poorly, and deteriorating as new listings are adding to the oversupply.
The market for houses requiring “Jumbo” loans remains stagnant.
Birmingham area Average Days on Market for New houses was 229 compared to last month at 262. One way to look at DOM is that older inventory is beginning to move, so increases in this number are not all bad! The Used house DOM was 135 in March compared with 136 last month (Sect A p.18). (Note: we made a slight calculation fix in DOM so the number is not directly comparable to prior reports, we no longer attempt to subtract pending days from active as it was causing some very wild distortions)
Average sales price for Sold New homes decreased to $200,933 from $229,927 last month (Sect A p2). Average sales prices for Sold Used homes increased to $138,837 from $127,745 last month (Sect A p2). The twelve month moving average price line for All, New, and Used homes is heading down reflecting that most sales activity continues to be on the lower end of the market. (Sect A p2). It’s hard to read too much into average prices with the continued absence of higher end sales.