Birmingham Area Home Sales Slow in October


Birmingham Area MLS* Monthly Observations for October 2010

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Sales in October dropped 25% to $120,783,955 from September’s $160,333,587. This is a decline of 32% from last October’s $178,100,683. An increasing percentage of sales are being reported after the 10th of the month when we get the data, so the comparisons to prior periods seem somewhat overstated; that is, next month we are likely to see more sales reported for the October time frame ,making the comparisons seem somewhat better. The housing situation is still pretty distressing with the twelve month moving average of total dollar sales chart continuing to show a downward slope.

Total unit sales were down 25% at 714 in October from 953 in September, a decrease of 239. This is a 39% reduction from October 2009 at 1,177 (for those who follow, this is almost identical to the % drop reported by the MLS). New sales declined 30% to 111 homes this month from 159 in September, a decrease of 48 units. Used sales deteriorated 24% to 603 homes in October from 794 last month, a decrease of 191 (Sect E p.3).

This month total inventory is virtually the same as last year at 12,764 vs. 12,808. Active New listings decreased to 1,152 in October from 1,327 in September, a decline of 175 units (Sect E p.3). The number of housing permits this month has decreased to 23 in September vs. 44 in the prior month for Jefferson County. Shelby County showed a slight increase. (See the website for details).

Absorption rate for New homes at a  6.8 months supply and a reduced sales pace, is better than the 8.9 months last year at this time (Sect E p.3). While the situation is still  distressed, New homes seem to be selling and supply is keeping in balance. Strangely, under $100,000 New homes are at 17.7 months of sales, while those priced from $100,000-$500,000 range from 5.4 to 6.6 months of inventory, a pretty “normal” situation in such abnormal times.. (Sect C p.1 compare to last month and Sect E p.3.) New house inventories in higher price ranges (above $500,000) remain excessive at over a year. This situation has been grim for some time.

Inventory shows a modest decline for Used homes. Absorption for Used homes in October 2010 shows 11,612 Used Active listings (Sect E p.3) and 13.2 months of supply. This is slightly worse than the 12.4 months of supply last year at this time (Sect E p.3). Since May the number of Used Active listings has dropped by more that 1,000! Unfortunately, the drop has been due more to cancellations than sales, but it is still somewhat positive news. The higher price ranges are doing poorly, but hopefully showing some signs of stability as New listings moderate. The market for houses requiring “Jumbo” loans remains stagnant.

Birmingham area Average Days on Market for New houses was 237 compared to last month at 182. The Used homes DOM was 137 in October, compared with 134 last month (Sect A p.18).
Average sales price for Sold New homes decreased to $223,528 from $229.998 last month (Sect A p2). Average sales prices for Sold Used homes increased to $159,158 from $155,874 last month (Sect A p2).

The twelve month moving average price line for both New and Used homes is heading up! This reflects a normalizing mix of home prices, with the elimination of the distortion due to sales of the lower-end being inflated by the tax incentives.  (Sect A p2).

TWB 11/13/10

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