Monthly Archives: August 2011

Slow July Sales in the Birmingham Real Estate market

by Tom Brander

Birmingham Area MLS* Monthly Observations for July 2011

Sales in July declined 7% to $202,737,155 from June’s $218,950,156, up 32% from last July’s $153,485,124. This is a normal month to month fluctuation indicating a somewhat healthier market without the distortion caused by the expiration of last year’s tax credit.

Total unit sales were down 4% to 1,195 in July from 1,245 in June, a decrease of 50. This is a 24% reduction from July 2010 at 962. New sales improved 23% to 148 homes this month from 120 in June, an increase of 28 units. Used sales declined 7% to 1,047 homes in July from 1,125 last month, a decrease of 78 (Sect E p.3).

This month Total Inventory is lower at 12,043 vs. 14,279 last year. Active New listings decreased to 957 in July from 1,295 in June, a decline of 338 units (Sect E p.3). Housing permits showed a increase in Jefferson County from 44 in May to 18 in June. Shelby County was up from 14 to 25 (see web site for details).

Absorption rate for New and Used homes last month reached new record highs of 11.5 and 14.5 months respectively. Last month presents a more accurate picture due to late closings and listings (that are not yet included in the current month statistics). See the chart (Sect C p.1).

New homes at a 8 months supply and a reduced sales pace, is one month better than last year at this time (Sect E p.3). The situation remains distressed. New home supply seem to be accumulating, and supply again stacking up. Strangely, under $100,000 New homes are at 15 months last month, and 9 this month, and those priced in the $100,000-$400,000 range have been climbing to 7 to 10 months (or more) of inventory, a deterioration from the last few months. (Sect C p.1 and Sect E p.3.) New house inventories in higher price ranges (above $500,000), remain excessive at over a year.

Absorption for Used homes in July 2011 shows 11,086 Used Active listings as a lower number than 12,959 last year, (Sect E p.3) which is still at 13 months of supply, a bit better than 14 months last year (Sect E p.3). There is increased listing activity, and higher inventories as summer continues.

Birmingham area Average Days on Market for New houses was 222 compared to last month at 217. The Used homes DOM was 145 in July, compared with 147 last month (Sect A p.18). An interesting side note is that the DOM for Used Homes, except the $500,000- $600,000 range, is 180 days or less, which 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, which is unlikely to be successful. Newsflash: If your home is not selling, reduce the price.

Average sales price for Sold New homes increased to $237,550 from $220,685 last month (Sect A p2). Average sales prices for Sold Used homes decreased to $160,057 from $171,083 last month (Sect A p2). The twelve month moving average price line for Used homes has been quite steady since mid 2009. New home prices have stabilized and show an upward trend (Sect A p2).

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CONDITIONS(TM)
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Alabama new home sales in June increase 15.5% from prior month

Published: Thursday, August 04, 2011, 7:00 AM

 

SingleFamilyPermitsIssued_June11.JPG
Trends: Alabama building permits courtesy of ACRE Infographics.

June new home sales in Alabama’s five metro markets that represent approximately seventy percent of all statewide transactions experienced a 15.5 percent increase from the prior month.

The spike in sales was primarily the result transactions associated with relocating displaced homeowners from their destroyed homes and the continuation of delayed closings from late April finally taking place in June as well as the month of May.

These two events are apparent when reviewing sales percent change from prior month in these impacted areas: Tuscaloosa (up 64% from May) and Huntsville (up 31%).

In June, Alabama new home sales outperformed the US market which showed declines of 1.0 percent from the prior month, according to the US Census Bureau & HUD. The release also reported that the South region experienced an increase of 3.5 percent from the prior month.

Demand: June new home sales were 44.0 percent below June 2010 when sales were surging to beat the deadline for the home buyer tax credit, thus skewing this traditional and much followed barometer of new construction activity.

In contrast, US new home sales reflected an increase of 1.6% percent increase from June 2010.

Year-to-date through June, Alabama metro market new home sales are 30.1 percent off last year’s pace.

Montgomery again led metro areas that were not impacted by disaster in sales improvement from the prior month posting a 7.9 percent gain (41 sales vs 38 in May). This figures remains below the 54 sales in June 2010.

Year-to-date, the Huntsville/Madison County area continues to lead the state despite its unfavorable year-over-year sales change of 12.7 percent.

Supply: Statewide new construction inventory has declined by approximately 27 percent from last June. All metro markets have experienced double-digit percent reductions in inventory since June 2010 with Mobile leading the state with an 36 percent decline in supply.

In fact, Alabama’s metro markets in June reflect 5.0 months of new home supply which is a significant move in the right direction. According to the National Association of Home Builders (NAHB), the US inventory of new homes for sale reached another all-time record low (records go back to 1963) at 164,000 homes or 6.2 months’ supply.

Pricing: Alabama’s metro market’s median price in June was $199,050, an increase of 5.0 percent from May 2011 and an increase of 5.9 percent from June 2010.

New Home Pipeline (see graph): June statewide housing starts retreated by 7.0 percent from the prior month and 25.3 percent below June 2010. Year-to-date through June, housing starts for new homes sales are 25.3 percent off last year’s pace. In contrast and for the 2nd consecutive month, June statewide building permits increased by 20.2 percent from the prior month and only 1.5 percent below June 2010. Year-to-date through June, housing permits for new homes sales are 22.7 percent off last year’s pace.

Residential Contract Values: According to McGraw-Hill, June residential contract values increased by 20.7 percent to $251.2 million, when compared to June 2010 values. This figure represents a pace last experienced in June 2009 ($248.8 million). June’s 10-year contract values average is $326.4 million or 23.1 percent higher than the June 2011.

Residential Construction Employment: According to the Alabama Dept. of Industrial Relations, statewide residential construction employment was up .4 percent (300 jobs) to 70,300 from last month but remains down 4.9 percent or 3,600 workers from June 2010. Moving forward, this figure will improve as reconstruction commences across the State in response to the April 27th disaster.

Local Results: 14 out of the 27 home builder associations (52 percent) reported gains in building permits from the prior month (May ’11) while 12 associations (44% – up from 26%) reported gains in housing starts.

Challenges & Opportunities: Market challenges remain including, elevated level of unemployment, lower consumer sentiment, competition from distressed existing home inventory, tight credit, and the slow growth of economy.

On the other hand, the destruction resulting from the tragic April 27th tornadoes will require a massive response and moving forward will favorably aid the recovery of our statewide construction industry.

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CONDITIONS(TM)
By Local Real Estate Experts

These agents are in the field every day. Who knows the local housing market better than the people who work it on a regular basis? Click on the “MORE” link after each summary to find out more about each agent and their opinion of the Real Estate market for this community. Agents, click here to share your opinions of this market.

Top>Alabama> Huntsville
Monrovia


Market Conditions Summary for Huntsville, Alabama


Reported by

Elaine Erves Simelton
as of 5/18/2011:
GREETING FROM HUNTSVILLE! ~~ The Hottest City in Northern Alabama. A Great Place to Call Home. For Up-to-date Stats on How Many Houses SOLD in This Area go to www.http://ElaineSellHuntsville.com We are currently experiencing a Stable… MORE->
About Elaine Erves Simelton
Watch one of my Television commercials.


Reported by
Oliner M. Bowers
as of 9/22/2010:
The market is good in the Huntsville area, with an average of 500-1000 homes sold… MORE->


Average Current Market Rating: 2 (2 ratings)

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Average Current Price Trend: 4.5 (2 ratings)

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Note: A strong Buyer’s Market does not necessarily mean that it is not a good time to sell your home. Likewise, a strong Seller’s Market does not necessarily mean it is a bad time to buy a home. We suggest contacting one of the Real Estate Professionals on this page for advice.

These reports reflect the views and opinions of their authors and are not necessarily the views and opinions of Realty Times.

Homewood is Alabama’s most walkable city

From: Birmingham Business Journal

Homewood is the state’s most walkable city, according to Walk Score‘s 2011 rankings of the nation’s most walkable cities.

The Over-the-Mountain city with its Soho Square development and pedestrian-friendly downtown area had a Walk Score of 53. That classified Homewood as a “somewhat walkable” city.

Birmingham, Selma and Florence were the state’s next most walkable cities. Each had a Walk Score of 40. All of those cities ranked in the upper “car-dependent” category, which means there are a few amenities within walking distance.

The rankings are based on proximity to nearby amenities.

The Magic City did have a higher Walk Score than Charlotte, Louisville, Kansas City, Memphis and Nashville.

New York, Boston and Philadelphia scored the highest among major cities.

You can click here to view the full rankings.

 

Why is this a good thing for investors?

Well, with the expansion of interest in lower costs and living expenses and with the wave of live green acts; it is good to look at places that will have appeal for things that don’t require so much of a commute. A walkable city is near a walkable city is definitely a plus for an investor. You may also want to look at cities that have plans to expand or improve their downtown areas within the next few years. Real estate around these cities will increase once the improvements of the area have taken effect, such as Huntsville.

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