Birmingham Area May Real Estate Sales Stronger than Last Month But Not Up To Last Year

Birmingham Area MLS* Monthly Observations for May 2014

As expected, May was stronger than April. Dollar sales in May improved by 8% to $278,899,194 from April’s $259,092,628, down by 8% from last May’s $304,451,191. The 12 month moving average line for total dollar sales has flattened indicating uncertain market conditions.  It seems that the slow start for the year has re-emerged. Sales levels are still healthy, just not growing as fast as anticipated.

Unit sales were up 1% to 1,414 in May from 1,396 in April, an increase of 18. This is down 9% from last May at 1,562. The greater percentage increase, month to month, in dollars than units, indicates an increase in average prices.

This year we are using the ACRE data and results for forecasting, which are derived in a slightly different method than this report. We had forecasted a full year gain of 8% for the full year. As of April the cumulative increase in units is only 3%.

New sales declined by 1 unit to 131 homes this month from 132 in April and off from 141 last year. Used sales were 1,283 homes in May up 1% from 1,264 last month, an increase of 19, and off by 140 units from 1,423 last year(Sect E p.3).

This month total inventory is 4% lower at 9,479 vs. last month at 9,862 and 10,404 last year. The drop in the current month is caused by month-end expirations which should come back on the market. Active New listings decreased to 713 in May from 1,017 in April (the highest level of new homes active since September 2011), a decline of 304 units (Sect E p.3).  Housing permits were down in Jefferson County to 119 in April from 133 in March. Shelby County went from 38 to 45 in April. It appears that builders are trimming their activity.

Absorption rate for New homes is at 5 months supply this month which is two months better than last year at this time. Last month though, shows 7 months of supply (Sect E p.3). The New homes for the most part have normal inventory levels in the 1-7 month range. (Sect C p.1 and Sect E p.3.)

Absorption for Used homes in May shows 8 months, one month better than 9 months last year. Used Active listings at 8,758 are lower than the 9,489 last year (Sect E p.3). The market performance is highly area specific, so check the individual area charts. For instance, Mountain Brook has about four months of inventory except in the over $900,000 category, which has 10 months of inventory (37 homes) with seven sold in that price range last month . The average days on market for that category is 165 indicating some older inventory is moving.

Birmingham area Average Days on Market for New houses is 216, compared with 221 last month. The Used homes DOM was 132 in May, compared with 137 last month (Sect A p.18). Average sales price for Sold New homes increased to $292,529 from $282,648 last month (Sect A p2). Average sales price for Sold Used homes increased to $187,512 from $175,461 last month (Sect A p2). The moving average price for all Homes has been up steadily for the last year. (Sect A p2).

Note the MLS has added 20 new areas #320-570, which seem to be placeholders for each county in the state. I have combined these into a single “other” area.
TWB 6/7/2014


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