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August Birmingham Real Estate Sales At A High Level

Birmingham Area MLS* Monthly Observations for August 2016

The last few months have seen a dramatic pick up in dollar sales over last year; some of this volume has been recorded well after the month end reports, but since we re-run full history every month it is now apparent. For instance, roughly $15 million dollars, and about 100 units of additional sales were recorded for July after our last monthly report. Inventories are down, and prices seem to be increasing. Total dollar sales for August were $349,754,613 up 17% from $298,493,234 last year, and down 5% from last month at $368,690,930.

Total Unit sales were up 1% to 1,724 in August from 1,708 in July, an increase of 16. This is up by 13% and 199 from last August at 1,525. New sales were off at 150 homes this month, and 192 in July, and off by 22 from 172 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 1,574 homes in August, up 4% from 1,516 last month, an increase of 58,  up by 221 units  from 1,353 last year (Sect E p.3). Expect late sales reports to improve this result next month.

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.  July overperformed the projection. The cumulative error is plus 7.6% year to date, that is actuals are running ahead of projections (through July).

Housing permits for July are about the same as last year. For Jefferson County, in July there were 129 permits compared with 130 last year. Shelby County was slightly off from last year’s level (see the web site).

Total inventory is slightly higher this month at 9,489 vs. last month at 9,433 and less than 10,524 last year. Active New listings decreased to 1,080 in August from 1,140 in July (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 4-8 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 August shows 6 months, which is less than the 8 last year. Used Active listings at 8,409 are up from last month of 8,293, and quite a bit less than 9,436 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 5 months of inventory except in the over $900,000 category, which has 12 months of inventory (54 homes), with 6 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 208 compared with last month at 241. The Used homes DOM was 111 in August vs 113 last month, (Sect A p.18). Average sales price for Sold New homes decreased to $320,868 from $337,315 last month (Sect A p2), and prices seem to be increasing. Average sales price for Sold Used was $191,624 this month compared to $200,479 last month. (Sect A p2).

All in all, the market continues to look quite healthy.
TWB 9/10/2016   

Survey Results, Outlook for 2015 Alabama Real Estate

The following slide show was presented to the Leadership Group of The Alabama Center For Real Estate. It summarizes the results of the 4th quarter survey, which forecasts the 1st quarter expectations of 2015. It also has the results of our 2012-2014 projections and our projections for the 2015 Alabama Real Estate Markets.

 

Alabama Coastal Real Estate Sales Slower in July

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

Sales dollars declined 27% in July to $107,815,755 from June of $148,329,630. This is 14% off July last year at $125,659,355. (Sect A p.2). The 12 month moving average line of sales had continued to point up steadily for three years has can best be described as “squiggly.” I would characterize the market activity as “unusual.” Inventories continue trending down.

In concert with ACRE, The Alabama Center for Real Estate, we did projections for 2014 full year sales. We used the ACRE provided data for the projections, which differs slightly from the data in this report. We projected unit sales for Baldwin county increasing by 47.7% over 2013 levels. We have examined our methodology and removed 65 sales from the last quarter  of 2013 which were caused by a major condo project closing. This reduces the expected 2014 gain to 32% over 2013 and the projected condo increase of  8% over 2013  As of June, the cumulative year over year change in units is up 7%, far short of the adjusted forecast. The condo actuals are cumulatively about 4% below the forecast.

On a unit basis, sales of all houses were up 3% at 472 this month vs. last month at 590, which is up 17% from last year’s 502. There is still substantial inventory available to satisfy demand.

Used Home sales declined 16% to 431 this month vs. 512 last month, which is off 6% from last year’s 459 (Sect A p.18). New Home sales were 41 this month vs 78 last month and compared with 43 last year.

New listings for New homes increased to 129 from 108 in June. Used homes New listings decreased to 719 from 787 in June 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 July, there were 3,739 Active Used homes, a reduction from 4,220 in June. The New home market, which peaked in July 2006 at 2,144 Active, now sits at 442.

The Absorption rate for New homes was 7 months of inventory in July vs. 7 in June. The Absorption rate for Used homes was 9 months of inventory for July vs. 10 in June. Over the last four years the drop in months of inventory for Used homes has been steady and impressive from 25 months plus in July 2008 to 9 months this July. The inventory of homes in the higher price ranges remains high, homes over $400,000 have over a years supply.

Average sales price for all homes has been improving modestly for the past year. For New units, prices increased to  $263,042 from $246,896 last month. (Sect A p.14). Average Used home prices decreased to $225,130 from $252,093 in June. The price trend is up for the year. Average Days On Market for New Sold properties in July was 202 this month vs. 203 last month. Days On Market for Used was 148 this month vs. 144 last month. Hopefully this month is not a harbinger of a slow fall sales season.

TWB 8/9/2014

Huntsville Real Estate Market Strengthens in April

Huntsville/North Alabama Area MLS Observations: Real Estate Market April 2014

April sales improved by 5% to $128,966,904 vs. March at $123,311,921. This was up 7% from last year’s $120,599,535. This is a better result than we saw last month hopefully pointing to more positive comparisons as the season progresses to the stronger months. The twelve month moving average line on the total dollar sales chart is roughly flat. Total unit sales improved  10% to 834 in April vs. 763 in March, an increase of 73. This was 6% better than last year at 799.

The way  ACRE and Brander Real Estate projections for 2014 are compiled has changed. This year we are using the ACRE data which differs slightly from the data in this report. I am now dependent on ACRE for the timing of data availability (for the projections only) and report release. Our projections for the Huntsville market for 2014 are for an increase of 0.9% over the 2013 level, essentially flat with 2013.

New sales remained at 143 this month vs. 143 last month, and compared with 130 last year.

Used sales increased to 691 this month vs. 620 last month, up 71, and compared with 669 last year (Sect E  p.3).

Inventory levels remain stubbornly high. Used inventory levels remain high this monthat11 months (see the chart Sect C p.1), with the situation continuing to be particularly challenged in the higher price ranges. Used homes over $500,000 have more than two years of inventory. New home absorption is 8 months of inventory overall, and this has been climbing with 10 months last month. (E-1). The New Home inventory level in the $300,000-$500,000 is approximately 5-6 months (Not bad!).

March housing permits issued were 91 compared with 60 in February (chart on the web site).

Total Active listings decreased this month to 8,864 compared to last month’s 9,027, and lower than last year at this time at 9,290, with the reduction in the current month exaggerated due to month-end expirations. (Sect A p.4 and Sect E p.3).  Active New listings decreased to 1,191 this month from 1,406 in March, down 215. (Sect E p.3). Active Used listings increased to 7,673 this month from 7,621 in March, up 52 and slightly below last year’s amount at this time of 7,796. (Sect E p.3).

Average Days on Market for Sold New homes was 181 vs. 179 days last month, with Used at 165 in April compared with 163 in March (Sect A p.18). Average sales price for Sold New homes was $229,274 vs. $240,802 last month. (Sect A p.2) Average sales price for Sold Used homes was $139,191 vs. $143,350 last month. (Sect A p.2) The average price line for Used homes is headed modestly down. The New home average price seems to be showing positive direction.

TWB 5/11/14

2nd Quarter Alabama Statewide Residential Real Estate Survey Outlook Optimistic

The survey projects expectations for the 2nd quarter of 2013. The scale ranges from 0-100 with 0 being much worse, 100 being much better, and 50 indicating no change expected.

The professional Real Estate community’s optimism soared this quarter. All of the overall indicators are at the highest levels we have seen since beginning the survey in 2010. Sales expectations are at 65 up 10 points from last quarter. Only availability of credit continues to be viewed somewhat negatively, now at 49, up five points from last quarter.

Market Indicators 2q 2013

Market Indicators 2q 2013

The national score at 57, up 10 points from last quarter, indicates that respondents are more optimistic about the overall economic picture. The participants are more positive on the statewide conditions at 62 up nine points from last quarter. Inventory expectations improved to 55 up 6 points indicating continued reduction of supply expected. Sellers may see some improvement for the first time in several years with a score of 56 up six points from last quarter. Financing continues to be viewed negatively at 49 indicating that buyers may face tight financing conditions.

Regional Results:

The coastal region continued to remain the most optimistic in the state at 69. On an overall basis all areas sales expectations gained at least 8 points with the lowest being the Huntsville North Alabama area at 61 still, indicating expansion expected.

Regional Outlook 2q 2013

Regional Outlook 2q 2013

This quarter showed substantial change in expectations in all regions. The results are encouraging, with overall measures in the expansion zone.

Commercial market participants (the majority of the respondents are from the Birmingham market area) turned positive this quarter (Total Stat) at 55 this quarter a five point improvement and climbing 14 points to 60 for sales expectations. Price expectations improved 6 points 52 indicating improved pricing conditions. The score for credit availability is looking stronger, up 7 points to 53, the first over 50 reading for this segment.

North Region

All areas except North Alabama had the highest levels we have yet seen. It is likely that anxiety over the sequester cuts effect on the defense oriented industry, served to dampen expectations. Nonetheless scores were positive and improved over the prior quarter. The total score of 53, up by 6. The sales outlook is positive at 61 up by 8 but with pricing pressure neutral at 51 (up by 6).

North Central Region

The North Central Region overall score improved to 58 up 8 from last quarter. The sales score improved to 65 from 54. Inventory score improved to 55 from 50 with, pricing moving to 56 from 52, and credit at 52.

South Central Region

The South Central Region participants’ outlook for sales improved from 65 from 51.  The only sub-segment declining and in negative territory is the Montgomery, Central Alabama Rural segment with sales expectations at 42, our sample size here was quite small however. The Suburban areas show sales expectations of 69 up from 52.

South Region

The Southern Region sales score are at the highest regional level, 69,  up 8.  Price expectations jumped 7 points to 62.

About the Alabama Real Estate Confidence Index and Survey:

More than 400 professionals responded to the 2nd quarter 2013 survey which was conducted during the month of March 2013. The survey, conducted by the Alabama Center For Real Estate now has the largest participation of any real estate survey. It provides important market insights. Full history and scores for each market segment are located here on the web http://goo.gl/1ByP7

The ACRE Leadership Council  determined the need for a statewide industry confidence index and this was adopted as the Council’s first initiative. Tom Brander, Council Member, was selected by the Council and Grayson Glaze, ACRE Executive Director, to spearhead and work with the Center to conduct and produce its Alabama Real Estate Confidence Index (ARECI). The Council appreciates everyone who participated.

For further information contact Tom Brander at Tombrander@tombrander.com or Grayson Glaze at gglaze@cba.ua.edu

Real Estate Professionals More Optimistic As Summer Approaches

Summary The survey projects expectations for the 2nd quarter of 2012. The scale ranges from 0-100 with 0 being much worse, 100 being much better, and 50 indicating no change expected.

The professional Real Estate community’s optimism continues to improve. The outlook for sales (yellow) this quarter is at the highest level recorded in the three years this survey has been conducted, 61, a five point improvement from last quarter. This is one point higher than last year at this time.

While all scores are up to new highs, the survey participants are still expecting continued declines in prices (47) and credit availability (48). The national score at 52, up from 48 last quarter, indicates that respondents are more constructive on the overall economic picture. The participants moved to positive sentiment on the statewide conditions at 59 up 5 points from last quarter. Sales expectations are more positive at 61 again up 5 points from last quarter. Inventory expectations improved to 52 from last quarter, the first time this indicator has been above 50 indicating improving conditions expected. Sellers are likely to be frustrated by pricing, and buyers will continue to have problems getting financing.

Regional Results:

The sales expectations for each region are within 1 point of each other from 60-61.

This quarter showed an improvement in all measures and in all regions. To some degree this is a seasonal phenomena, the levels are at high points in the three year history of the survey. Of course the three years of the survey have been some of the most challenging in recent times. None the less the results are encouraging, and taken together with the early results of actual sales in the 1st quarter and the new ABRE sales projections for the remainder of the year that ACRE/Brander has recently released all point to improving conditions.

Commercial market participants (the majority of the respondents are from the Birmingham market area) moved to projecting a continuing improving market this quarter at 59 this quarter vs. 54 last for sales expectations. Price expectations are still soft, at 48 vs 45 last quarter indicating pricing pressure. The score for credit availability has turned constructive, at 54 up from 48 points from last quarter.

North Region

North Alabamaexperienced a consistent improvement in all scores.  The total score of 53, up from 51, a 2 point improvement from last quarter. The Rural markets were an exception to the increasing sales expectations with a drop to 50 from 59 last quarter.

North Central Region

The North Central Region overall score improved to 54 from 50 last quarter, The sales score improved 6 points to 61. Inventory is continuing to improve at 53 with, pricing, and credit below the 50 mark at 47, and 49 respectively.

South Central Region

The South Central Region participants outlook for sales improved 6 points to 61.  Rural participants sales expectations improved 10 points to 60.

South Region

The Southern Region sales score improved 4 points to 60. Rural participants sales expectations improved 7 points to 57.

About the Alabama Real Estate Confidence Index and Survey:

Almost 500 professionals responded to the 2nd quarter 2012 survey which was conducted during the month of March 2012. The survey, conducted by the Alabama Center For Real Estate now has the largest participation of any real estate survey. It provides important market insights. Full history and scores for each market segment are located here on the web http://goo.gl/n6o8O

The ACRE Leadership Council  determined the need for a statewide industry confidence index and this was adopted as the Council’s first initiative. Tom Brander, Council Member, was selected by the Council and Grayson Glaze, ACRE Executive Director, to spearhead and work with the Center to conduct and produce its Alabama Real Estate Confidence Index (ARECI). The Council appreciates everyone who participated.

For further information contact Tom Brander at Tombrander@tombrander.com or Grayson Glaze at gglaze@cba.ua.edu

Baldwin County Slow Real Estate Sales in January

Baldwin County & Alabama Coastal MLS*: Observations for the Month of January 2012

Sales Dollars decreased 19% in January to $46,905,756 from December’s $57,963,803. This is 14% below January last year at $54,787,622. (Sect A p.2). The 12 month moving average line of sales flattened out once again. Inventories are continuing to come 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 11% to 269 this month vs. 303 last month, which is 3% down from last year’s 278.

Used Home sales declined 14% to 238 this month vs. 278 last month, which is down 7% from last year’s 255 (Sect A p.18). New Home sales were 31 this month vs 25 last month. Low sales of New homes reflects intense competition from existing, and the shutdown of new construction.

New listings for New homes increased to 47 from 34 in December. Used houses New listings increased to 692 from 425 in December 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 January, there were 3,517 Active Used homes, a reduction from 3,755 in December. The New home market, which peaked in January 2006 at 2,144 Active, now sits at 321.

The Absorption rate for New homes was 12 months of inventory for January vs. 13 in December. The Absorption rate for Used homes was 10 months of inventory for January vs. 11 in December. Over the last four years the drop in months of inventory for Used homes has been steady and impressive from 25 months plus in January 2008 to 10 months this January.

Average sales price for all homes has been stable for the past year. For New units, prices decreased to $187,616 from $192,034 last month. (Sect A p.14). Average Used home prices decreased to $172,646 from $191,234 in December.

Average Days On Market for New Sold properties in January was 229 this month vs. 186 last month. Days On Market for Used was 161 this month vs.169 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, but we are thinking about the problem!

TWB 2/11/2012