Birmingham Area MLS* Monthly Observations for April 2010
Sales continued to improve in April to $207,238,535 up 14% from March at $181,248,400. This is an improvement of 20% from last April ($173,199,172). On top of last months’ 55% increase, the beginning of spring is looking quite good. This was aided by the expiration of the tax credit at the end of April and normal spring enthusiasm, Normally, we would expect the outlook for sales next month to trend up (see the chart Sec A p.4), but with the expiration of the tax credit, the transition to more normal, non-incentivized sales will rest both on the seasonal factors as well as hopefully, the improving economy. The twelve month moving average line of total dollar sales chart again seems to be fairly “flat”, but with a slight uptick recently.
Total unit sales improved by 6% to 1,285 in April from 1,214 in March, an increase of 71. This is a 13% improvement from April 2009 (1,139). Note that the total dollar sales percentage was up more than the unit percentage which indicates that the mix of homes is shifting slightly with more activity in the higher priced sector. New sales deteriorated 12%! to 186 homes this month from 211 in March, a decrease of 25 units. Used sales improved 10% to 1,099 homes in April from 1,003 last month, an increase of 96 (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 1% from last year at this time at 13,353 vs. 13,517. Active New listings decreased to 1,335 in April from 1,692 in March, a decline of 357 units (Sect E p.3). In March it appears that builders increased permits. The number of housing permits has increased substantially, 91 in March vs. 37 in the prior month for Jefferson County. Shelby County almost doubled (See the web site for details). New inventory is now below the 1,800 level which reflects more normal pre-2004 levels, still an uncomfortable 7.2 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 another new all-time high of 402 Used homes, a 15 month supply.
For both New and Used homes the months of inventory has begun to creep up, which is a concern. Absorption rate for New homes improved to 7.2 months of inventory, which is better than the 8.9 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. That situation is getting worse as new listings come on, and sales are sluggish.
April 2010 shows 12,018 Used Active listings (Sect E p.3). Absorption for Used homes is at 12.9 months of supply. This is worse than the 12.1 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 232 compared to last month at 229. 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 139 in April compared with 135 last month (Sect A p.18). (Note: 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 increased to $202,887 from $200,797 last month (Sect A p2). Average sales prices for Sold Used homes increased to $161,275 from $149,299 last month (Sect A p2). The twelve month moving average price line for New homes is heading down, reflecting that most sales activity continues to be on the lower end of the market. But the average price for Used has begun to move up, slightly reflecting a bit of activity in the upper price ranges. (Sect A p2). It’s hard to read too much into average prices with the shifting mix.