June Sales Advance 10% over May in Birmingham Area

Birmingham Area MLS* Monthly Observations for June 2010

Total Dollar sales for the first 6 months of the year are running 3% above the comparable period last year, at $1,079,829,791 this year vs. $1,045,237,555 last year. Total unit sales for the first 6 months increased 6% to 6,831 this year from 6,426 last year.

Sales in June improved to $236,798,745, up 10% from May at $214,934,175. This is a decline of 2% from last June,  at  $241,580,127. I think and hope that with the expiration of the tax credit we are beginning to see the transition to more normal, non-incentivized sales with some evidence of a better market from an expanding economy. The twelve month moving average of total dollar sales chart remains fairly “flat”.

Total unit sales were about even with 1,346 in June from 1,368 in May, a decrease of 2. This is about the same as June 2009, at 1,341. New sales improved 20% to 247 homes this month from 206 in May, an increase of 41 units. Used sales deteriorated 4% to 1,099 homes in June from 1,142 last month, a decrease of 43 (Sect E p.3).

A somewhat larger than normal inventory increase in Used homes is evident. For this month total inventory is up .6% from last year at this time at 13,636 vs. 13,559. Active New listings decreased to 1,277 in June from 1,509 in May, a decline of 232 units (Sect E p.3). In May it appears that builders decreased permits. The number of housing permits has decreased considerably to 21 in May vs. 83 in the prior month for Jefferson County. Shelby County also declined substantially (See the web site for details). New inventory is now well below the 1,800 level which reflects more normal pre-2004 levels with 6.7 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 now 393, which is very close to April’s all-time high of 402 Used homes, a 14 month supply.

For Used homes the months of inventory has begun to creep up, which is a concern. Absorption rate for New homes improved to 6.7 months of inventory, which is better than the 9.4 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.

June 2010 shows 12,359 Used Active listings (Sect E p.3). Absorption for Used homes is at 13 months of supply. This is slightly worse than the 12.5 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 187 compared to last month at 206. The Used homes DOM was 142 in June, compared with 138 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 $219,004 from $200,104 last month (Sect A p2). Average sales prices for Sold Used homes increased to $166,246 from $152,104 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.

TWB 7/11/10


One thought on “June Sales Advance 10% over May in Birmingham Area

  1. Andy "The Mortgage Hunter" Gagliano

    At this point, it truly is hard to judge what lasting effect, if any, the homebuyer tax credit has. The general consensus is that the tax credit simply moved future sales into the present, but it didn’t cause someone to buy who was not planning on buying. I’m scared to think what the June numbers would have looked like locally if the tax credit expiration wasn’t looming. Without some local job creation soon, I don’t expect the housing market to sustain these month over month gains. Locally and nationally we need our leaders to help create private sector jobs rather than take those jobs away with more legislation.
    Keep up the good work on the blog! I’m glad I found your blog. It is a huge time saver.
    I’d love to repost some of your posts on my Facebook fan page and my personal page.


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