Birmingham May Real Estate Sales Still Weak – Inventory Building

Birmingham Area MLS* Monthly Observations for May 2011

Sales in May improved 17% to $182,960,952 from April’s $156,532,879, but down 16% from last May’s $219,048,541.  While the comparison to last year is disappointing, this is a more normal month to month fluctuation which indicates a healthier market without the distortion of last years tax credit.

Birmingham May 2011 Absorption

Birmingham May 2011 Absorption

Total unit sales were up 5% to 1,054 in May from 1,004 in April, an increase of 50. This is a 23% reduction from May 2010 at 1,372. New sales improved 11% to 111 homes this month from 100 in April, an increase of 11 units. Used sales improved 4% to 943 homes in May from 904 last month, an increase of 39 (Sect E p.3).

This month Total Inventory is somewhat lower at 12,478 vs. 16,905 last year. Active New listings decreased to 1,054 in May from 1,272 in April, a decline of 218 units (Sect E p.3).  Housingpermits showed a decrease in Jefferson County from 62 in March to 40 in April.

Absorption rate for New and Used homes last month reached new highs of 9.6 and 14.1 months respectively. Last month presents a more accurate picture due to late closings and listings (that are not yet included in the current month statistics). Please see the chart (Sect C p.1).

New homes at a 8 months supply and a reduced sales pace, is one month worse than last year at this time (Sect E p.3). The situation remains distressed. New home supply seem to be accumulating, and supply again stacking up. Strangely, under $100,000 New homes are at 15 months of sales, while those priced from $100,000-$400,000 range from 6 to 9 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 May 2011 shows 11,424 Used Active listings as a lower number than 12,491 last year, (Sect E p.3) which is still at14 months of supply, a bit worse than 13 months last year which was at a reduced sales level (Sect E p.3). There are indications of increased listing activity, and a trend towards higher inventories as summer arrives.

Birmingham area Average Days on Market for New houses was 202 compared to last month at 221. The Used homes DOM was 146 in May, compared with 142 last month (Sect A p.18). An interesting side note is that the DOM for used homes under $600,000 is 180 days or less which indicates that well priced homes are moving in less than 6 months. The high months of inventory indicates that sellers, including bank owners, may still be holding out too much for higher prices.

Average sales price for Sold New homes increased to $210,389 from $205,685 last month (Sect A p2). Average sales prices for Sold Used homes increased to $169,255 from $150,403 last month and increased from $152,078 last year (Sect A p2). The twelve month moving average price line for Used homes has been quite steady since mid 2009. New homes prices have stabilized and even showed an upwards trend (Sect A p2).

TWB 6/11/11


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