June Birmingham Real Estate Sales Slow and Inventory Builds

Birmingham Area MLS* Monthly Observations for June 2011

Sales in June improved 13% to $211,428,788 from May’s $187,812,737, but down 15% from last June’s $248,469,261.  While the comparison to last year is disappointing, this is a more normal month to month fluctuation now which indicates a healthier market without the distortion of last year’s tax credit.

Total unit sales were up 8% to 1,179 in June from 1,089 in May, an increase of 90. This is a 17% reduction from June 2010 at 1,427. New sales declined 3% to 113 homes this month from 117 in May, a decrease of 4 units. Used sales improved 10% to 1,066 homes in June from 972 last month, an increase of 94 (Sect E p.3).

This month Total Inventory is somewhat lower at 12,447 vs. 14,215 last year. Active New listings decreased to 1,022 in June from 1,309 in May, a decline of 287 units (Sect E p.3).  Housing permits showed a increase in Jefferson County from 40 in April to 44 in May. Shelby County was down, see web site for details.

Absorption rate for New and Used homes last month reached new record highs of 10.5 and 14.5 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). See the chart (Sect C p.1).

New homes at a 9 months supply and a reduced sales pace, is two months 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 and those priced in the $100,000-$400,000 range have been climbing to 7 to 10 months of inventory, a deterioration from the last few months. (Sect C p.1 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 June 2011 shows 11,425 Used Active listings as a lower number than 12,861 last year, (Sect E p.3) which is still at 14 months of supply, a bit worse than 13 months last year (Sect E p.3). There is increased listing activity, and higher inventories as summer continues.

Birmingham area Average Days on Market for New houses was 217 compared to last month at 202. The Used homes DOM was 147 in June, compared with 146 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, are still holding out for higher prices, which is unlikely to work.

Average sales price for Sold New homes increased to $224,353 from $209,932 last month (Sect A p2). Average sales prices for Sold Used homes increased to $174,556 from $167,953 last month (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 7/10/11


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