May Birmingham Residential Real Estate Market A Bit Ahead of Last Year

Birmingham Area MLS* Monthly Observations for May 2016

This year seems to be unfolding almost identically to last as far as sales levels go. Inventories are down, and prices seem to be level with last year as well.  Total Unit sales were up 14% to 1,832 in May from 1,609 in April, an increase of 223. This is up by 207 from last May at 1,625. New sales were up at 162 homes this month, and 140 in April, and off by 16 from 146 last year. The low inventory levels of new homes suggest a good environment for builders even with prices trending steady. Used sales were 1,670 homes in May, up 14% from 1,469 last month, an increase of 201, and up by 191 units  from 1,479 last year (Sect E p.3).

ACRE numbers are slightly different from those we report. With ACRE, we released our month by month 2016 forecast which can be seen here: ACRE. For Birmingham, the full year projection for 2016 = 13,460, a 1.25% difference from 2015 actual of 13,294.  April overperformed the projection. The cumulative error is plus 5% year to date, that is, actuals are running ahead of projections (thru April).

Housing permits, the census bureau section that supplies this data, has been down for three months now. They have made data available in a different format, and I’m not entirely sure that the data is comparable, but it seems to be. Based on the new data, housing permits are up, as I would expect . For Jefferson County, in February and March there were 128 and 156 permits respectively compared with 98 and 125 last year. Similarly, Shelby County has been running about double last year’s level (see the web site).

Total inventory is slightly higher this month at 9,529 vs. last month at 9,117 and less than 10,341 last year. Active New listings decreased to 1,068 in May from 1,055 in April (Sect E p.3). Absorption rate for New homes is at 7 months supply this month, which is even with 7 months last year. (Sect E p.3). The New homes have normal inventory levels in the 4-6 month range depending on area and price range. However, the $700,000-$900,000 range has 13 months of supply (28 houses) (Sect C p.1). The level of inventory, both in months of inventory and housing units has been continuing to improve for the year.

Absorption for Used homes in May shows 6.5 months, which is less than the 8 last year. Used Active listings at 8,461 are up from last month of 8,062, and quite a bit less than 9,327 last year (Sect E p.3). Inventory levels have continued to trend down from prior years. Market performance is highly area specific, so check the individual area charts. For instance, Mountain Brook has between 1 and 7 months of inventory except in the over $900,000 category, which has 16 months of inventory (61 homes), with 11 sold in that price range last month. There are a number of MLS areas showing similarly low levels of inventory, including Homewood (only 4 months of inventory).

Birmingham area Average Days on Market for New houses is 203 compared with last month at 211. The Used homes DOM was 111 in May vs 126 last month, (Sect A p.18). Average sales price for Sold New homes increased to $302,550 from $302,391 last month (Sect A p2), and prices seem to be increasing slowly compared to last year. Average sales price for Sold Used were distorted by the above mentioned erroneous sales in Bessemer . (Sect A p2).

TWB 6/15/2016


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