November Real Estate Sales In North Alabama Remain Slow


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Huntsville/North Alabama Area MLS Observations: Residential Real Estate Market November 2010

November dollar sales decreased 14% from October’s weak result. November sales were $92,988,162 vs. October $108,459,192. This was 34% below last year of $140,190,798. The twelve month moving average line on the total dollar sales chart once again has an ugly downward slant.

Total unit sales decreased from 637 in October to 578 in November, a decrease of 59.

New sales decreased from 155 homes last month to 134 this month, a decrease of 21.

Used sales decreased from 482 homes last month to 444 this month, a decrease of 38 (Sect E  p.3).

Used inventory levels remain high at 13 months with the situation particularly challenged in the higher price ranges. Used homes over $100,000 are now over a year of inventory, and in $700,000-$800,000 price range close to 7 years of inventory. Prices continue to be pressured.

New homes are at 9 months of inventory overall, and homes priced under $100,000, are at 16 months of inventory. Greater than $500,000 are at over two year’s worth of inventory. (E-1).

There seem to be a large number of housing permits issued, given the market conditions. There were 102 new single family housing permits issued in October, up from 99 in June in Huntsville City, according to the Census Department. This permit level is way above the sales level for the comparable area. New home inventory remains high and climbing.

Total Active listings decreased by 8% this month to 9,025 compared to last month’s 9,842, but 9% greater than last year at this time, at 8,308 (Sect A p.4 and Sect E p.3). (This will increase when reported next month.) New homes New listings are once again about 2 times the rate of sales, which combined with the high number of building permits does not look encouraging. (Sect B p.1). Active New listings decreased from 1,664 last month to 1,442 in November, down 222. (Sect E p.3). Active Used listings decreased from 8,160 last month to 7,583 this month, down 577. This is above last year’s amount at this time (6,578) (Sect E p.3).

Absorption for New homes was 9 months of inventory in November. This is better than 10 months last year at this time (Sect E p.8). Absorption for Used homes was 13 months of inventory in November, which is about even with last month at 14. This is slightly worse than last year’s level of 11 months (Sect E  p.8).

Average Days on Market for Sold New homes was 143 vs. 161 days last month, with Used at 151 in November compared with 148 in October (Sect A p.18).

Average sales price for Sold New homes was $228,859 vs. $220,571 last month. (Sect A p.2)

Average sales price for Sold Used homes was $140,363 vs. $154,089 last month. (Sect A p.2)

The North Alabama market seems to be having a harder time recovering after the tax incentive expiration, than some of the other markets we report on. The mix of higher and lower priced homes is jumping around quite a bit so it’s hard to read too much into average prices.

TWB 12/12/10

 

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3 thoughts on “November Real Estate Sales In North Alabama Remain Slow

  1. Keith Benicek

    So the motive that “New Home” builders have for continuing to get new building permits is the $8,300+ increase in sales prices? (“Average sales price for Sold New homes was $228,859 vs. $220,571 last month”). Pretty crazy.

    Seriously though, are these new building permits primarily for custom homes, or for tract homes? If they are mostly custom homes, I can understand the continued building – people with enough money for a custom home care little about the economy; besides I would think that lot prices are down considerably anyway, possible offering the offset incentive to build even with a glut homes on the market.

    Reply
    1. Tom Brander Post author

      Boy I wish I know, but the point about some number of permits being for custom is valid,,, In the case of North Alabama however I doubt that this is much of the answer.. the “stated” value and the numbers of permits makes it practically a certainty that most of the permits are lower priced tract housing.

      Reply
  2. Matrixband

    Sometimes it seems builders build because they know no other way to operate. If the market is very slow, economics would say don’t build, wait (supply&demand). I have a hypothesis that, if builders wait, they potentially loose their subcontractor labor force, and their cash flow stalls. So, they continue to build using slightly reduced material and labor costs hoping for big sales later on (Huntsville is continually reported to be weathering the recession better than most places)– So, the problem is all the builders all over the place flock here thinking it’s the best place to operate, making the situation much worse. I wonder.

    -and I can say from the higher income people I talk to, even they are very fearful about building a custom home or buying anything because it is still so very hard to sell their present homes which are generally in the upper $ range.

    Reply

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