Birmingham Real Estate Sales Flat in 2011, 2012 should be better


Birmingham Area MLS* Monthly Observations for December 2011

Year end summary:

TOTAL NEW USED New Avg price Used Avg price All Avg Price Total $ Sales
2010 12,290 1,842 10,448 $219,462 $149,413 $159,589 $1,967,714,083
2011 12,468 1,392 11,076 $220,139 $151,429 $159,220 $1,998,732,347
% change 1.45% -24.43% 6.01% 0.31% 1.35% -0.23% 1.58%

As the above chart illustrates, 2011 was largely even with 2010, but that was a win compared to multiple years of decline. New Home sales were off due to lack of supply and the heavy competition with the used market.

Projections:

Using our newly developed projections, described here, we forecast total unit sales of 957 for the month vs the actual of 958. For all of 2012 we forecast total unit sales of 13,430 vs the 12,468 in 2011, which would be a 7.7% increase. This projection is still preliminary based on my estimate of the January unemployment rate. We expect that average prices will still be under pressure. We will be refining the methodology over the next few months. We expect that the projections will yield more interesting insights.

Monthly:

Sales in December declined 8% to $144,754,123 from November’s $158,165,809, up 10% from last December’s $131,046,122. The 12 month moving average line for total dollar sales remains tilted slightly upward.

Unit sales were down 1% to 958 in December from 971 in November, a decrease of 13. This is a 10% improvement from December 2010 at 868. New sales improved 22% to 130 homes this month from 107 in November, an increase of 23 units. Used sales declined 4% to 828 homes in December from 864 last month, a decrease of 36 (Sect E p.3).

This month total inventory is dramatically lower at 9,611 vs. 11,919 last year and 11,185 last month. The dramatic drop in the current month was undoubtedly caused by year-end expirations which will come back on the market shortly. Active New listings decreased to 816 in December from 1,135 in November, a decline of 319 units (Sect E p.3).Housing permits showed a decrease in Jefferson County to 77 in November from 78 in October. Shelby County was up to 19 from 18 (see website for details).

Absorption rate for New and Used homes last month remains high. New homes are at  7 months supply this month with a reduced sales pace, and even with last year at this time (Sect E p.3). New home supply seems to be stable. Under $100,000 New homes are at 15 months supply. The New home $100,000-$400,000 price range has an almost normal inventory level in the 6-7 month range. (Sect C p.1 and Sect E p.3.)

Absorption for Used homes in December shows 9 months, three months better than 12 months last year. Used Active listings at 8,795 lower than 10,777 last year (Sect E p.3), (Sect E p.3).

Birmingham area Average Days on Market for New houses was 209 compared to last month at 191 . The Used homes DOM was 141 in December, compared with 148 last month (Sect A p.18). NOTE: DOM for Used Homes 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. Again: If the home is not selling, reduce the price, particularly since we are in the slower sales season of the year.

Average sales price for Sold New homes increased to $237,784 from $233,344 last month (Sect A p2). Average sales prices for Sold Used homes decreased to $137,491 from $154,164 last month (Sect A p2). The twelve month moving average price line for Used Homes has been quite steady since mid 2009. Average Home prices, new and used, have stabilized  (Sect A p2). This is mostly a reflection in the change of “mix” with more larger homes being sold, but the price of any specific home remains under pressure.

TWB 1/15/12

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