Birmingham December Real Estate Results Continue The Upbeat Trend Of The Year

Birmingham Area MLS* Monthly Observations for December 2016

December saw a continuation of the pick up in dollar sales over last year, while unit sales dropped slightly from last years’ level. Prices seem to be modestly increasing. Total dollar sales for December were $267,737,105 up 9% from $244,629,462 last year, and down 4% from last month at $278,084,382.

Full Year Summary:

	All units	New units	Used Units	Avg New Price	Avg Used Price	Avg All price	Total dollars	New home dollars
2016	18373	2047	16326	$301,328	$192,425	$204,794	$3,791,190,965	$619,232,393
2015	16956	1769	15187	$302,040	$183,855	$196,350	$3,356,751,833	$534,039,767
% ∆	8.36%	15.72%	7.50%	-0.24%	4.66%	4.30%	12.94%	15.95%

Total Unit sales were off 4% at 1,281 in December from 1,337 in November, a decrease of 56. This is off by 2% and 22 from last December at 1,303. New sales were up to 206 homes this month, and 166 in November, and up by 38 from 168 last year. The low inventory level of new homes suggests a good environment for builders, and prices have begun to show a more solid uptrend. Used sales were 1,075 homes in December, off 8% from 1,171 last month, a decrease of 96, off by 60 units  from 1,135 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.  December overperformed the projection. The cumulative error is plus 9% for the year; that is actuals are ahead of projections, 14,705 through year end, an increase of 11% over 2015. The forecast for 2017 should be out in late January, once all the December numbers are recorded.

Housing permits for November are a bit less than last year. For Jefferson County, in November there were 53 permits compared with 58 last year. Shelby County was somewhat lower than last year’s level as well.

Total inventory is slightly lower this month at 7,926 vs. last month at 8,608 and less than 9,123 last year. (Sect C p.1). Active New listings decreased to 1,047 in December from 1,169 in November (Sect E p.3). Absorption rate for New homes is at 6 months supply this month, which is less than 7 months last year. (Sect E p.3). The New homes have normal inventory levels in the 4-8 month range depending on area and price range. (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 December shows 5 months, which is less than the 6 last year. Used Active listings at 6,879 are down from last month of 7,439, and quite a bit less than 8,126 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 4 months of inventory, 3 months overall, except in the over $900,000 category, which has 6 months of inventory (32 homes), with 9 sold in that price range last month. There are a number of MLS areas, particularly those known as the “over the mountain” communities, showing similarly low levels, including Homewood which has 3 months of inventory.

Birmingham area Average Days on Market for New houses is 171 compared with last month at 209. The Used homes DOM was 119 in December vs 122 last month, (Sect A p.18). Average sales price for Sold New homes increased to $313,274 from $299,890 last month (Sect A p2), over a several month period prices seem to be increasing. Average sales price for Sold Used was $189,026 this month compared to $194,964 last month. (Sect A p2).

All in all, the market continues to look quite healthy.

TWB 1/14/2017  

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Birmingham 2015 Residential Real Estate Sales Finish Strong

Birmingham Area MLS* Monthly Observations for December 2015

Monthly Birmingham Sales

Full year results:

	Total Units	New	Used	Total Dollars
2014	15,686	1,698	13,988	$3,006,565,892
2015	16,813	1,748	15,065	$3,334,574,593
% change	7.2%	2.9%	7.7%	10.9%

Dollar sales in December experienced an expected year end pick-up of 18% to $235,361,806 from November $200,218,537, almost identical to last December’s of $238,138,339 (off 1%). The 12 month moving average line for total dollar sales over the last three months of the year has flattened.

Total Unit sales were up 20% to 1,231 in December from 1,023 in November, an increase of 208. This is up by 5% from last December at 1,172. New sales were up at 158 homes this month and 115 in November and off from 177 last year. The price pressure and low inventory levels of new homes suggests a good environment for builders. Used sales were 1,073 homes in December, up 18% from 908 last month, an increase of 165, and up by 78 units or 8% from 995 last year (Sect E p.3).

ACRE numbers are slightly different from those we report. With ACRE, we released our 2015 forecast which can be seen here: ACRE. December sales were not yet available. ACRE’s year-to-date sales forecast through November projected 12,332 closed transactions while the actual sales were 12,289 units, (off by 43 units) a cumulative variance of -.35%. Given the December increase in actual sales reported here, I expect we will come in very close for the full year.

Housing permits were off in Jefferson County to 58 in November from 101 in October, which is off from 72 last year. This is the lowest level since August 2014. Shelby County was 26 from 32 last month, up from 10 last year.

Total inventory is slightly lower this month at 8,876 vs. last month at 9,571 and somewhat less than 9,002 last year. Active New listings decreased to 931 in December from 1,025 in November (Sect E p.3). Absorption rate for New homes is at 6 months supply this month, which is about even with 6 months last year. (Sect E p.3). The New homes for the most part have normal inventory levels in the 1-7 month range depending on area and price range. However, the $800,000-$900,000 range has 22 months of supply (11 houses) (Sect C p.1). This level of inventory, both in months of inventory and housing units has been quite stable for the year.

Absorption for Used homes in December shows 6 months which is about even with 7 last year. Used Active listings at 7,945 are even with last month at 8,546 and a bit less than 8,109 last  year (Sect E p.3).For the year, inventory levels have generally trended down from prior years. Market performance is highly area specific, so check the individual area charts. For instance, Mountain Brook has between 1 and 9 months of inventory except in the over $900,000 category, which has 10 months of inventory (39 homes), with none sold in that price range last month . There are a number of MLS areas showing similarly low levels of inventory, including Homewood (only 3 months of inventory).

Birmingham area Average Days on Market for New houses is 205 compared with last month at 207. The Used homes DOM was 125 in December vs 121 last month, (Sect A p.18). Average sales price for Sold New homes decreased to $310,211 from $333,656 last month (Sect A p2). Average sales price for Sold Used homes decreased to $173,670 from $178,247 last month (Sect A p2). The moving average price for all homes has been up steadily for the past year. (Sect A p2).

TWB 1/10/2016

Alabama Coastal Real Estate Has an Outstanding Year

Baldwin County & Alabama Coastal MLS*: Observations for the Month of December 2015

Baldwin Monthly Sales

Full Year Results:

	Total Units	New	Used	Total Dollars
2014	5,655	674	4,979	$1,339,354,065
2015	6,300	821	5,479	$1,536,937,695
% change	11.4%	21.8%	10.0%	14.8%

Sales dollars increased more than expected; 33% in December to $122,750,797 from November $92,442,408. This is 24% above December last year at $99,245,507. (Sect A p.2). There was also an expected increase in last month late reported sales, making every month this year better than last year’s healthy levels.The 12 month moving average line of sales, which had continued to point up steadily for three years, has now gotten a healthy upwards tilt. Lack of new construction now seems to be depressing sales somewhat. Inventories are trending down.

Sales in most price categories show consistent improvement. Inventories are improving, but remain high at over a year for anything over $500,000. This month the $400,000-$500,000 inventory dipped to 9 months.

In concert with ACRE, The Alabama Center for Real Estate, we have projected expectations for 2015. We use the ACRE provided data for the projections, which differs slightly from the data in this report. The projection for 2015 located here expected a unit increase of 17% over 2014 actual. Through November cumulative sales are running 8% ahead of the projection. As of the moment December is not yet available.

On a unit basis, sales of all houses were up 22% at 479 this month vs. last month at 394, which is 22% better than last year’s healthy level of 466. Used Home sales decreased 17% to 414 this month vs. 351 last month, which is up 3% from last year’s 399 (Sect A p.18). New Home sales were 65 this month vs 43 last month and compared with 66 last year. New listings for New homes decreased to 99 from 134 in November. Used homes New listings decreased to 366 from 527 in November with net inventory down.

The absolute number of Used Active homes on the market, which had a slight peak mid-summer of ‘09, has been consistently  improving. In December, there were 2,956 Active Used homes, a reduction from 3,657 in November and a new multi year low level. New homes, which peaked in December 2006 at 2,144 Active, now sits at 486.

The Absorption rate for New homes was 7 months of inventory in December vs. 9 in November. The Absorption rate for Used homes was 7 months of inventory in December vs. 8 in November. Over the last four years the drop in months of inventory for Used homes has been steady and impressive from 25 months plus in November 2008 to 7 months this December. The inventory of homes in the upper price range remains high with homes over $500,000 at over a year’s supply, but even here we are seeing improvement. I would expect construction to begin to pick-up in the under $400,000 range, but so far have not seen it.

Average sales price for all homes has been improving modestly for the past year. For New units, prices increased to  $241,463 from $227,591 last month. (Sect A p.14). Average Used home prices increased to $258,589 from $235,487 in November. The price trend is up for the year. Average Days On Market for New Sold properties in December was 161 vs last month of 170. Days On Market for Used was 160 compared to last month 149.

TWB 1/10/2016

Birmingham Area Real Estate Sales Robust in December

Birmingham Area MLS* Monthly Observations for December 2014

A short sweet summary of the Year and quarter:

Total unit sales year to year: 2013: 15920 2014: 16744  a 5% increase

4th quarter unit sales   2013: 3361    2014: 3479    a 4% increase

Prices: (based on an average of 12 month average prices)

New   2013: $271,813   2014: $284,082   a 5% increase

Used 2013: $171,313   2014: $178,040   a 4% increase

Inventory:

New   2013: 864    2014: 815   a 6% reduction

Used 2013: 8487 2014: 7874 a 7% reduction

Dollar sales in December improved by 23% to $233,754,358 from November’s $190,787,845, up by 11% over last December’s $211,145,543. The 12 month moving average line for total dollar sales is showing a very steady upward trend indicating modest and consistent growth.

Total Unit sales were up 10% to 1,144 in December from 1,039 in November, an increase of 105. This is up 2% from last December at 1,121. New sales increased by 48 units to 171 homes this month from 123 in November and up from 139 last year. Used sales were 973 homes in December, up 6% from 916 last month, an increase of 57, and down by 9 units from 982 last year(Sect E p.3). Note the higher growth in Dollars (11%) compared to Units (2%) year to year, indicating stronger pricing.

Keeping in mind the ACRE numbers are slightly different from those we report, From ACRE: ”Forecast: December sales results were 1.1 percent or 11 units below our monthly forecast. The Center projected 12,845 closed transactions for the market in 2014 while the actual sales were 12,539 units, representing a variance of 2.4 percent.” We determined that the Birmingham MLS is assigning some sales to the Talladega market which were previously reported as part of Birmingham, thus reducing the reported sales in Birmingham, so the forecast is probably a bit more accurate than it appears on a “comparable” basis. With Acre we will be releasing our forecast for 2015 soon so stay tuned. Based on what I see so far I would expect pretty healthy market gains.

This month total inventory is 12% lower at 8,689 vs. last month at 9,905 and 9,351 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 815 in December from 1,098 in November, a decline of 283 units (Sect E p.3).  

Housing permits were down in Jefferson County to 72 in November from 113 in October. Shelby County went from 20 to 10 in November.

Absorption rate for New homes is at 6 months supply this month which is one month better than last year at this time. Last month though, shows 8 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 December shows 7 months, one month better than 8 months last year. Used Active listings at 7,874 are lower than the 8,487 last year (Sect E p.3). Market performance is highly area specific, so check the individual area charts. For instance, Mountain Brook has about two months of inventory except in the over $900,000 category, which has 6 months of inventory (32 homes) with five sold in that price range last month . The average days on market for that category is 178. There are a number of MLS areas showing similarly low levels of inventory, including Homewood and Centerpoint.

Birmingham area Average Days on Market for New houses is 189. The Used homes DOM was 134 in December, (Sect A p.18). Average sales price for Sold New homes increased to $310,781 from $275,989 last month (Sect A p2). Average sales price for Sold Used homes increased to $185,623 from $171,224 last month (Sect A p2). The moving average price for all homes has been up steadily for the past year. (Sect A p2).

TWB 1/16/2015

Alabama Coastal Sales Off From Last Year

Baldwin County & Alabama Coastal MLS*: Observations for the Month of December 2014

A short sweet summary of the Year and quarter:

Total unit sales year to year: 2013: 5,847  2014: 6,092    a 4% increase

4th quarter unit sales               2013: 1,270   2014: 1,362    a 7% increase

Prices: (based on an average of 12 month average prices)

New   2013: $281,062   2014: $268,850   a 4% decrease

Used 2013: $220,194   2014: $234,634   a 7% increase

Inventory:

New   2013: 459    2014: 437    a   5% reduction

Used 2013: 3,716 2014: 3,249 a 13% reduction

Sales dollars increased 1% in December to $96,165,774 from November of $95,270,573. This is down 26%  from December last year at $130,825,801. There was a very big spike in year end condo closings last year. (Sect A p.2). The 12 month moving average line of sales which had continued to point up steadily for three years can now best be described as “squiggly.” I would characterize the market activity as “unusual”. The lack of new construction now seems to be depressing sales somewhat. Inventories continue trending down.

In concert with ACRE, The Alabama Center for Real Estate, we did projections for 2014 full year sales. We use the ACRE provided data for the projections, which differs slightly from the data in this report. We project unit sales for Baldwin County increasing by 32% over 2013 and the projected condo increase of  8% over 2013.  As of November, the cumulative year over year change in units is up 5%, far short of the adjusted forecast. The condo actuals are cumulatively at about 8% below the forecast, with a 2% year to year change.

On a unit basis, sales of all houses were up 5% to 449 this month vs. last month at 426, which is off 3% from last year’s 461. There is still substantial inventory available to satisfy demand.

Used Home sales increased 6% to 388 this month vs. 366 last month, which is up from last year’s 347 (Sect A p.18). New Home sales were 60 this month vs 60 last month and compared with 114 last year.

New listings for New homes decreased to 61 from 79 in November. Used homes New listings decreased to 420 from 568 in November with net inventory down.

The absolute number of Used Active homes on the market, which had a slight peak mid-summer of ‘09, has once again been improving. In December, there were 3,249 Active Used homes, a reduction from 3,962 in November. The New home market, which peaked in December 2006 at 2,144 Active, now sits at 437.

The Absorption rate for New homes was 8 months of inventory in December vs. 9 in November. The Absorption rate for Used homes was 8 months of inventory for December vs. 10 in November. Over the last four years the drop in months of inventory for Used homes has been steady and impressive from 25 months plus in November 2008 to 8 months this December. The inventory of homes in the upper price range remains high with homes over $400,000 at over a year’s supply. Even here we are seeing improvement, which may set the stage for some acceleration in new construction.

Average sales price for all homes has been improving modestly for the past year. For New units, prices decreased to  $238,807 from $271,144 last month. (Sect A p.14). Average Used home prices decreased to $210,333 from $215,852 in November. The price trend is up for the year. Average Days On Market for New Sold properties in December was 164. Days On Market for Used was 155.

TWB 1/16/2015

Birmingham Sales Spurt in December up 11% from November

Birmingham Area MLS* Monthly Observations for December 2013

Dollar sales in December improved by a better than expected 11% to $206,142,852 from November’s $186,359,182, up by 21% from last December’s $169,625,116. The 12 month moving average line for total dollar sales continues to move up indicating continued improving market conditions.

	Total $	%chg	Total Units	%chg	New Units	%chg	Used units	%chg
2012	2,320,890,295		13,542		1,525		12,046
2013	2,752,061,916	19%	14,793	9%	1,584	4%	13,227	10%

Note: The 19% increase in dollar sales vs 9% increase in unit sales is mostly due to higher priced properties picking up  in activity.

Unit sales were up 7% to 1,085 in December from 1,017 in November, a increase of 68. This is up 11% from December 2012 at 974.This number will increase as late sales are reported. Our ABRE/ACRE Projections for 2013 are 1,065 sales for December. For December, actual sales for the month were 2% worse than projections and 1% higher than year to date. Please see here for a summary of the projections http://goo.gl/nytW8 and the spreadsheet with details and month by month projections http://goo.gl/GEYWa (see the tabs on the bottom).

Birmingham Projection to Actual

New sales increased by 15 units to 136 homes this month from 121 in November and are about even with 135 last year. Used sales improved 6% to 949 homes in December from 896 last month, a decrease of 53, and up by 110 units from 839 last year(Sect E p.3).

This month total inventory is 8% lower at 8,581 vs. last month at 9,870 and 9,224 last year. The drop in the current month is caused by month-end expirations which will come back on the market. We are seeing a seasonal downtick in inventory and which is slightly lower than prior years, although New home inventories are beginning to look a bit high. Active New listings decreased to 784 in December from 1,069 in November, a decline of 285 units (Sect E p.3).  Housing permits were down in Jefferson County to 53 in November ( the lowest level in quite some time) from 122 in October. Shelby County went from 28 to 24 in November.

Absorption rate for New homes is at 6 months supply this month which is even with last year at this time. Last month though, shows 8 months of supply (Sect E p.3). The New homes for the most part have normal inventory levels in the 1-7 month range. The  $700,000- $800,000 new inventory is at 12 months (7 homes). (Sect C p.1 and Sect E p.3.)

Absorption for Used homes in December shows 7 months,one month better than 8 months last year. Used Active listings at 7,797 are lower than the 8,404 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 three months of inventory except in the over $900,000 category, which has 7 months of inventory (26 homes) with nine sold in that price range last month . The average days on market for that category is 157. Birmingham area Average Days on Market for New houses is 213, same as last month.

The Used homes DOM was 135 in December, same as last month (Sect A p.18). Average sales price for Sold New homes increased to $281,589 from $274,239 last month (Sect A p2). Average sales price for Sold Used homes increased to $176,867 from $170,956 last month (Sect A p2). The moving average price for all Homes has been up steadily for the last year. (Sect A p2).

TWB 1/12/2014

ABRE Analytics: 2013 Forecast for Alabama Residential Sales

Last year, ABRE Analytics, a collaborative research partnership consisting of the Alabama Center for Real Estate (ACRE) and Tom Brander, began studying the correlation between unemployment rates and future real estate sales projections in selected markets across the State of Alabama.

View full sizeABRE Analytics: 2013 residential sales projections for selected real estate markets. All rights reserved.

With the release of the metro unemployment data for January 2013, ABRE Analytics is pleased to present our 2nd annual forecast stemming from this methodology and related commentary.

Area	Full year 2011 Actual	Full year 2012 Proj	% chg from 2011	2012 Actual	Err % Diff to proj	Act 2012 % Diff to 2011	Forecast 2013	2013 F’cast to 2012 Act	Method Unemp or last Q
Statewide	36965	41,992	14%	39280	-6%	6%	41,799	6%	Last Q
Huntsville	8610	9,050	5%	9189	2%	7%	9,835	7%	Unemp
Birmingham	12468	14,550	17%	13514	-7%	8%	14,571	8%	Last Q
Auburn	1132	1,138	0%	1233	8%	9%	1,338	8%	Last Q
Tuscaloosa	1743	1,826	5%	1735	-5%	0%	1,935	12%	Unemp
Montgomery	2774	3,679	33%	3111	-15%	12%	3,342	7%	Last Q

Note: the error bars are at +/- 10%

The above table summarizes last year’s results and our expectations for 2013. These predictions assume no “major events”. As expected with any new trends model in its inaugural trial run, the 2012 predictions were mixed. Alabama residential saleswere up 5.9 percent in 2012.

In Huntsville, the forecast was within 2% of the full year 2012 results. In the aggregate, the results pointed in the right direction right, but with some error so this led the team to explore some alternative approaches for this year’s predictions to improve accuracy. In the markets with the greatest error we revised our methods to use the last quarter of 2012 sales via straight line linear regression instead of the unemployment rate. This method appears to be more accurate in most markets historically and hopefully going forward.

With these adjustments, above is the overview of what ABRE Analytics think might happen in 2013. As for the projection of a 12% increase for Tuscaloosa that is out of line with the other markets, ABRE’s opinion is that this may be a little too optimistic, but we have yet to figure out a consistent method to arrive at a better projection for Tuscaloosa in 2013. Of course, the local market’s near-term response to the tornado of April 27, 2011 certainly has a role with the difficulty in identifying a projection that could be presented with more confidence. Last year we experienced a similar issue with Montgomery, which prompted us to develop the alternative methodology of using last quarter sales for predictions.

The method ABRE used for 2012 was based entirely on the January unemployment rate for a market area. The assumption was that the January unemployment rate eliminated the effect of holiday temporary work and would reflect the mood of the populace towards buying and selling a new home in the upcoming year. A standard linear regression line yielded a better than 80% correlation since 2004 in all areas. The standard error however is somewhat high. This method also has the benefit of using two longer term trends, unemployment and home sales, and only at a single point per year, which eliminates a lot of “noise” in both series.

The seasonal regularity of sales is such that if you know the total sales for a year, dividing the total by the average proportion of the yearly sales attributable to a month has shown to be remarkably stable. Exceptions to the regularity do occur, such as fiscal cliff drama and the tax credit for first time home buyers in 2009. ABRE eliminates this data when calculating the monthly spreads.

ABRE originally chose unemployment data as it is one of the more timely pieces of data released by the government, as well as being released by geographies that generally correspond to the reported real estate market areas. Other data from various government agencies are released so late as to not be timely enough for meaningful projections.

So, what ABRE presents is our best estimate of next year’s sales which specifically excludes the possible impact of unpredictable governmental action or inaction, although even this seems to be having less impact as both the populace and markets begin to ignore political histrionics. For what it is worth, ABRE did test everyone’s favorite housing predictor, interest rates, and could not find any useful correlation.

In each case ABRE experiments with prior years data to see how well the prediction methodology would have worked. We tried using the last quarter sales of the prior year to “regress” against the full year sales of the projected (next) year. This is based on the same premise that recent data may be indicative of future results.

In each case, except Huntsville and Tuscaloosa, this methodology (last quarter of the year to the following year) resulted in greater historical accuracy in predicting and considerably better correlation numbers. We did exclude 2010 from the analysis since the last quarter of 2009 had abnormally low sales, (although the full year sales were as expected), due to the 1st time homeowners tax credit that pulled sales into earlier quarters and depressed the year end.

Complete spreadsheets with all data are available as public Google spreadsheets, which also include month by month projections, at http://goo.gl/jtJGW. ABRE presents these projections as a “work in progress” and as a tool for assessing how well current sales are performing against some level of “informed” expectation. You should not rely on them, but nonetheless ABRE hopes the projections are found useful. ABRE welcomes comments and suggestions for improvement.

About ABRE Analytics: Strategic collaboration is one of the keys to accelerating the flow of insights in the 21st century. The Alabama Center for Real Estate (ACRE) and Tom Brander has been successfully collaborating since 2009. The flow of ideas stemming from this relationship have led to solutions to better serve the Alabama real estate industry and consumers. ABRE (ACRE/Brander Real Estate) Analytics is designed to foster future creative thinking while also providing hands-on experience for student interns of ACRE.

About ACRE: ACRE’s core purpose is to advance the profession of real estate in Alabama by providing relevant resources in the areas of research, education and outreach. The Center, founded in 1996 by the Alabama Association of REALTORS, the Alabama Real Estate Commission and the Office of the Dean at UA’SCulverhouse College of Commerce, also acts as an industry liaison for the benefit of business school students pursuing a career in real estate. To learn more, please visit ourwebsite.

About Tom Brander: Tom Brander is a prominent real estate publisher. He produces The Rudulph/Brander Monthly Real Estate Report in the Birmingham, Huntsville and Baldwin County markets. His company, OSWCO, LLC (Open Software Company) is an authorized Google reseller. He has earned the Google apps sales consultant certification and the Google apps deployment certification, from Google. Tom also co-produces the ACRE quarterly Real Estate Sentiment Index and report in conjunction with ACRE. He is a designated ACRE Education Instructor and serves as a member of the ACRE Board of Trustees. To learn more, please visit http://oswco.com.

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

Huntsville Real Estate Sales Flat in 2011

Huntsville/North Alabama Area MLS Observations: Real Estate Market December 2011

Year end summary:

	TOTAL	NEW	USED	New Avg price	Used Avg price	All Avg Price	Total $ Sales
2010	8,544	1,857	6,687	$225,137	$147,760	$164,545	$1,412,705,316
2011	8,610	1,764	6,846	$228,839	$142,279	$160,086	$1,379,625,696
% change	0.77%	-5.01%	2.38%	1.64%	-3.71%	-2.71%	-2.34%

As the above chart illustrates, 2011 was largely even with 2010, but that was a win compared to multiple years of decline. Price pressure indicated by the decline in average prices will likely continue.

Projections:

We published our preliminary outlook for 2012 on the web site Here. I forecast a 2.2% increase in units for 2012. Currently this is based on my estimate of the January unemployment rate which will be released in Late February. Given the pricing pressures, it is likely that total dollar sales will be down slightly. The numbers will be revised when the final unemployment rate for January comes out. 

December sales improved 6% to $109,029,076 vs. November at $103,296,410. This was virtually identical to last year at $109,443,153. The twelve month moving average line on the total dollar sales chart is flat.

Total unit sales increased to 688 in December vs. 668 in November increasing of 20.

New sales increased to176 this month vs.142 last month, increasing 34.

Used sales decreased to 512 this month vs. 526 last month, decreasing 14 (Sect E  p.3).

Used inventory levels remain high this month at 12 months (see the chart Sect C p.1), with the situation particularly challenged in the higher price ranges. Used homes over $100,000 are still over 12 months of inventory and over $400,000 have two or more years of inventory.

New home absorption is 9 months of inventory overall, (with last month at 10 months), (E-1). The New Home inventory level in the $300,000-$500,000 is approximately 5 months (not bad).

There continue to be a large number of housing permits issued in Huntsville city, given the market conditions. November decreased to 78  vs. 79  in October (chart on the web site).

Total Active listings decreased this month to 7,920 compared to last month’s 9,034, which is below last year at this time at 8,879 with the reduction likely exaggerated due to year end expirations. (Sect A p.4 and Sect E p.3).  Active New listings decreased from 1,491 last month to 1,320 in December, down 171. (Sect E p.3). Active Used listings decreased from 7,543 last month to 6,600 this month, down 943 and below last year’s amount at this time of 7,473. (Sect E p.3).

Average Days on Market for Sold New homes was 177 vs.142 days last month, with Used at 142 in December compared with 149 in November (Sect A p.18). Days on Market at or below 6 months, while the inventory numbers are way higher, indicates well priced homes are selling. Sellers, including bank owners, are not adjusting to the new price reality which contributes to inventory build-up.

Average sales price for Sold New homes was $238,330vs. $212,742 last month. (Sect A p.2)

Average sales price for Sold Used homes was $131,021 vs. $138,949 last month. (Sect A p.2)

The Average price lines which were on a upwards slope for a while, turned down particularly for Used Homes. Prices for individual properties remain under pressure.

TWB 1/12/12

Baldwin County Has A Good 2011 In Real Estate

Baldwin County & Alabama Coastal MLS*: Observations for the Month of December 2011

Year end Summary:

	TOTAL	NEW	USED	New Avg price	Used Avg price	All Avg Price	Total $ Sales
2010	3,788	360	3,428	$198,008	$201,010	$200,781	$760,995,789
2011	4,392	322	4,070	$215,567	$200,589	$201,504	$887,630,802
% change	15.95%	-10.56%	18.73%	8.87%	-0.21%	0.36%	16.64%

The above chart illustrates, 2011 was a very substantial improvement over 2010. New Home sales were off due to lack of supply and the heavy competition with the used market. Prices remain under pressure.

Monthly Results:

Dollar sales this month decreased 2% to $57,553,203 from November’s $58,582,263. This is 15% below December last year at $67,350,226. (Sect A p.2). The 12 month moving average line of sales flattened out once again. Inventories have been coming down quite dramatically. Unit sales have recovered to normal levels. Dollar sales still lag reflecting fewer high end sales and lower prices. This situation is starting to reverse, with more high end homes selling. Still, it is unlikely that prices will increase for a while. 

On a unit basis, sales of all houses declined 8% to 297 this month vs. 322 last month, which is 9% down from last year’s 325.

Used Home sales declined 10% to 272 this month vs. 303 last month, which is down 8% from last year’s 296 (Sect A p.18). New Home sales were 25 this month vs 19 last month. Low sales of New homes reflects intense competition from existing, and the shutdown of new construction.

New listings for New homes decreased to 34 from 57 in November. Used houses New listings decreased to 422 from 512 in November with net inventory down.

The absolute number of Used Active homes on the market, which had a slight peak mid-summer of ‘09, has once again been improving. In December, there were 3,461 Active Used homes, a reduction from 4,004 in November. The New home market, which peaked in December 2006 at 2,144 Active, now sits at 317.

The Absorption rate for New homes was 12 months of inventory for December vs. 14 in November. The Absorption rate for Used homes was 10 months of inventory for December vs. 12 in November. Over the last four years the drop in months of inventory for Used homes has been steady and impressive from 25 months plus in December 2008 to 10 months this December.

Average sales price for all homes has been stable for the past year. For New units, prices decreased to $192,034 from $219,064 last month. (Sect A p.14). Average Used home prices increased to $193,943 from $179,604 in November.

Average Days On Market for New Sold properties in December was 186 this month vs. 174 last month. Days On Market for Used was 169 this month vs. 190 last month.

While we have developed some interesting projections for the Real Estate Market in the Statewide, Birmingham and Huntsville markets, the numerous events on the coast such as the oil spill and several tropical storms, make the methods we used in the other markets unsuitable for the coast.

TWB 1/15/2012