February Residential Sales In Birmingham Still Slow


Birmingham Area MLS* Monthly Observations for February 2011

Sales in February improved 3% to $102,916,457 from January’s $99,560,676, down 12% from last February’s $117,411,643.  This is a slight improvement over last month. February usually shows some improvement over January. This year the month to month improvement is lackluster.

Total unit sales were up 3% to 684 in February from 666 in January, an increase of 18. This is a 17% reduction from February 2010 at 826. New sales declined 16% to 69 homes this month from 82 in January, a decrease of 13 units. Used sales improved 5% to 615 homes in February from 584 last month, an increase of 31 (Sect E p.3).

This month total inventory is somewhat lower at 12,023 vs. 13,015 last year. Active New listings decreased to 1,100 in February from 1,238 in January, a decline of 138 units (Sect E p.3). Housing permits Showed an increase in Jefferson County from 35 in December to 67 in January..

Absorption rate for New homes at a 7 months supply and a reduced sales pace, is better than the 8 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 16 months of sales, while those priced from $200,000-$500,000 range from 5 to 7 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.

Absorption for Used homes in February 2010 shows 10,923 Used Active listings (Sect E p.3) which is 12 months of supply, the same as last year at this time (Sect E p.3). Since May 2010 the number of Used Active listings has dropped by almost 1,700! Unfortunately, the drop has been due more to cancellations than sales, but it is still positive news. It is also important to note that much of the decline is seasonal as sellers wait out the slow winter months. There are some signs of increasing listing activity as spring approaches.

Birmingham area Average Days on Market for New houses was 212 compared to last month at 228. The Used homes DOM was 143 in February, compared with 152 last month (Sect A p.18).

Average sales price for Sold New homes increased to $206,300 from $202,354 last month (Sect A p2). Average sales prices for Sold Used homes increased to $144,198 from $142,068 last month (Sect A p2). The twelve month moving average price line for Used homes has been quite steady over the last year or so, but New homes prices continue to drift downward.(Sect A p2).

The reports this month are a bit earlier than usual due to the way the dates fall. Also, I have to attend a conference next week-end. Since I make it a point to get the report out the Monday prior to the 15th and this month the 15th falls on a Tuesday, we are a little early this month which means there will be a modest upwards adjustment of sales as late ones are reported next month.

TWB 3/04/11

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3 thoughts on “February Residential Sales In Birmingham Still Slow

  1. Tom Horn

    Something you did not mention but that I discovered was that the increase in unit sales were a result of an increase in foreclosure sales, which are still a strong influence on values. The statistic about months of inventory for those homes under $100,00o being greater than homes from $200,000-$500,000 is very interesting. Great summary.

    Reply
    1. Tom Brander Post author

      Thanks. I liked your piece on the townhomes..

      While it is clear that Foreclosures are impacting the market, I don’t see much “value” in them as a rule. People complain that foreclosures are lowering values. In the main if the house has deteriorated, the value drops. That is the case with both foreclosures and regular sales. It is more likely that the foreclosure has been poorly maintained, so its value may be lower. It seems to me though that many of the banks in fact are still pricing their foreclosures too high which is why the market is not clearing out inventory more rapidly.

      In short, foreclosures sell for market price, and many if not most are not bargains.

      Reply
  2. Tom Horn

    Great points, however regarding the conditon of the homes I would like to add that todays foreclosure is not what they were five years ago. They are in much better conditon these days (at least the ones I have appraised and the ones I view online through the Birmingham MLS). The profile of homeowners that have been foreclosed on include more white collar workers who pay attention to their homes condition, but have unfortunatley lost their jobs and as a result were not able to keep their home.

    Reply

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