Monthly Archives: April 2012

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 itsAlabama 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

Posted in ACRE, Alabama Center for Real Estate, Alabama Real Estate Confidence Index, Baldwin,Birmingham, Forecast, Huntsville, Jefferson County, Montgomery, North Alabama, Shelby County, Tuscaloosa, Uncategorized | Tagged , , , , | Leave a reply

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Birmingham March Residential Real Estate Sales Soft

Birmingham Area MLS* Monthly Observations for March 2012

Sales in March improved 17% to $162,227,603 from February’s $139,164,184, down 1% from last March’s $164,121,105. The 12 month moving average line for total dollar sales is tilted upward.

Unit sales were up 15% to 1060 in March from 919 in February, an increase of 141. This is off 1% from March 2011 at 1,076. This is 21% unfavorable to our projection of 1,279 sales expected for March and 15% unfavorable year to date. The complete monthly projections from ABRE (a joint project between ACRE and Brander Real Estate) can be found here http://goo.gl/WFHrO (along with the worksheets that show the methodology). It is likely that the results will close in on projections as the spring unfolds. New sales declined 11% to 102 homes this month from 114 in February, a decrease of 12 units. Used sales improved 19% to 958 homes in March from 805 last month, an increase of 153 (Sect E p.3).

This month total inventory is dramatically lower at 10,138 vs. 12,900 last year and 10,720 last month. The drop in the current month is caused by month-end expirations which should come back on the market shortly. Active New listings decreased to 834 in March from 1,123 in February, a decline of 289 units (Sect E p.3).Housing permits showed an increase in Jefferson County to 95 in February from 79 in January. Shelby County was down to 15 from 20 (see website for details).

Absorption rate for New and Used homes is improving.New homes are at 7 months supply this month with a reduced sales pace, and about even with last year at this time at 8 months (Sect E p.3). New home supply seems to be stable. Under $100,000 New homes are at 20 months supply. The New homes in the $100,000-$400,000 price range have 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 March shows 10 months, four months better than 14 months last year. Used Active listings at 9,304 are lower than the 11,754 last year (Sect E p.3), (Sect E p.3).

Birmingham area Average Days on Market for New houses was 194 compared to last month at 208 . The Used homes DOM was 146 in March, compared with 153 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 more active sales season of the year.

Average sales price for Sold New homes decreased to $237,079 from $237,357 last month (Sect A p2). Average sales prices for Sold Used homes increased to $144,098 from $139,262 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). The price of any specific home still remains under pressure.

TWB 4/6/12

Posted in Alabama Center for Real Estate, Birmingham, Construction, Forecast, Home values,Jefferson County, MLS, Monthly comments, real estate, sales forecast, sales projections |Tagged , , , , , | 2 Replies

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March 2012 Residential Sales Soft On The Alabama Coast

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

Sales Dollars increased 21% in March to $78,411,645 from February’s $64,803,320. This is 8% above March last year at $72,390,530. (Sect A p.2). The 12 month moving average line of sales is flat once again. Inventories are continuing to come down. It is hard to read too much into comparable sales in these slow months.

On a unit basis, sales of all houses improved 24% to 383 this month vs. 308 last month, which is 2% down from last year’s 390.

Used Home sales improved 31% to 354 this month vs. 271 last month, which is down 1% from last year’s 356 (Sect A p.18). There was a noticeable increase in sales in the under $200,000 range, to 226 units. New Home sales were 29 this month vs 37 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 39 from 53 in February. Used houses New listings increased to 631 from 629 in February 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 March, there were 3,431 Active Used homes, a reduction from 3,818 in February. The New home market, which peaked in March 2006 at 2,144 Active, now sits at 297.

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

Average sales price for all homes has been stable for the past year.For New units, prices increased to $230,466 from $185,463 last month. (Sect A p.14). Average Used home prices decreased to $202,622 from $213,805 in February.

Average Days On Market for New Sold properties in March was 206 this month vs. 176 last month. Days On Market for Used was 178 this month vs.196 last month.

We modified the subdivision charts to show those subdivisions with more than 20 sales since 2008 rather than 2005, we hope it make it easier to find subdivisions of interest.

TWB 4/8/2012

Posted in Alabama Coast, Baldwin, Home values, Monthly comments, real estate | Tagged, , , , | Leave a reply

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Sales Projections for Alabama Real Estate Markets 2012

ABRE Analytics studies correlation between unemployment rates and future real estate sales projections; projects statewide real estate sales growth of 13%

With the release of the metro unemployment data for January 2012, ABRE Analytics is pleased to present our combined projections and commentary for the Alabama real estate market. One note, the current projections are considerably more optimistic than the preliminary ones due to the much better than expected unemployment rates.

Area 2011 Projection 2011 Actual 2011 Error 2012 Projection Correlation% 2004-2011 % change from 2011
Statewide 37,118 36,965 -0.41% 41,992 83.68% 13.60%
Huntsville 8,259 8,610 4.23% 9,050 77.60% 5.11%
Birmingham 12,737 12,468 -2.15% 14,550 86.77% 16.70%
Auburn 1,016 1,132 10.27% 1,138 83.40% 0.49%
Tuscaloosa 1,662 1,743 4.64% 1,826 80.62% 4.78%
Montgomery 3,335 2,774 -20.24% 3,679 84.65% 32.63%

Preliminary looks at the Mobile and Baldwin county areas showed poor results, probably mostly due to exogenous events like hurricanes and oil spills. The projected increase for Montgomery seems out of line. It is also noted that the performance of the projection for 2011 in Montgomery was quite poor. Possible reasons include the high dependence on government employment and the high uncertainty surrounding it in spite of the low, and declining unemployment rate.

ABRE Analytics present 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 we hope you will find them useful.

It is always possible that catastrophic financial events or natural disasters will dramatically change people’s outlook for the future and therefore immediately impact the plans for home purchases. For the time being however we do not see anything that predicts nearly as well as unemployment. Unemployment rates have issues such as people dropping out of the workforce, but overall dropping rates are one of the best indicators of consumer expectations, and therefore predictors of home buying intent.

In the process of developing this methodology we also tested it in other geographies and found similar results. Further, we tried to find correlations to mortgage interest rates and found them to be not at all predictive of home buying activity.

Month to month break-out of the yearly projections are done by taking the sum of the 2004-2011 monthly volumes, for each market, and deriving the monthly spread of sales from those volumes.

The monthly estimated volumes do show more variation since we are dealing at finer levels of detail. The monthly tables are located here http://goo.gl/WFHrO, along with all the worksheets for deriving the forecasts.. The detailed spreadsheets also show the 1st two months projections vs. actuals for 2012, which look quite accurate, except for the previously mentioned Montgomery.

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 when Mr. Brander was appointed to the ACRE Leadership Council. Council members provide insight and counsel on current market trends, and enhance the sustainability of ACRE through vision, resourcefulness, and creativity. Without creativity and collaboration, two recent ACRE projects, the “Alabama Real Estate Confidence Index” and the “Alabama Residential Data Center” gadget for smartphones would still be on the drawing board. The flow of ideas that in turn lead to solutions to better serve the Alabama real estate industry and consumers is virtually an endless stream and ACRE and Tom Brander are forming ABRE (ACRE/Brander Real Estate) Analytics as a strategic collaborative umbrella that will foster future creative thinking while also providing hands-on experience for student/interns of ACRE.

This latest initiative explores methods to project future residential real estate sales. “Late last year, Tom shared his published preliminary projections that were based on estimates of the US Bureau of Labor Statistics January unemployment rates for a limited area in Alabama. The preliminary results looked quite good and initial test showed high accuracy for 2011 (when calculated blind from the 2011 January unemployment data) and ACRE desired to broaden the project across applicable statewide markets”, according to Grayson Glaze, executive director of ACRE.

About ACRE: ACRE, housed within the UA’s Culverhouse College of Commerce, collects, maintains and analyzes the state’s real estate statistics, and is a trusted resource for Alabama real estate research, education and outreach. The relationship between the Center and our industry stakeholders is one of the Center’s greatest strengths. Alabama companies and individuals partner with the Center bringing a wealth of resources and experiences, becoming, in effect, extensions of the Center, a network through which our outreach to the Alabama real estate industry is enhanced and enriched.To learn more, please visit www.acre.cba.ua.edu.

About Tom Brander: Tom provides Real Estate market reporting services which can be found at http://tombrander.com and Software services for Web, mobile and Data analysis, using Open Source Software, more information at http://oswco.com . He is a senior member of the ACRE Advisory council, and assists ACRE in its research programs.

Posted in Alabama Center for Real Estate, Auburn, Birmingham, Huntsville, Montgomery, North Alabama, real estate, sales forecast, sales projections, Tuscaloosa | Tagged , , , , , , , | 6 Replies

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February Birmingham Real Estate Sales a Good Harbinger For Spring

Birmingham Area MLS* Monthly Observations for February 2012

It is shaping up to be good spring! Sales in February improved 20% to $136,263,984 from January’s $113,514,352, up 18% from last February’s $115,791,214. The 12 month moving average line for total dollar sales is tilted increasingly upward.

Unit sales were up 18% to 906 in February from 771 in January, an increase of 135. This is a 17% improvement from February 2010 at 773. This is 2.7% unfavorable to our preliminary projection of 930 sales expected for February. Our full year projections will be revised up due to the final January 2012 unemployment rate being better than expected. (I did not want to hold this report up any more to wait on that). New sales improved 29% to 111 homes this month from 86 in January, an increase of 25 units. Used sales improved 16% to 795 homes in February from 685 last month, an increase of 110 (Sect E p.3).

This month total inventory is dramatically lower at 9,756 vs. 12,483 last year and 10,519 last month. The drop in the current month is caused by month-end expirations which should come back on the market shortly. Active New listings decreased to 807 in February from 1,076 in January, a decline of 269 units (Sect E p.3).Housingpermits showed an increase in Jefferson County to 79 in January from 64 in December. Shelby County was up to 20 from 6 (see website for details).

Absorption rate for New and Used homes is improving. New homes are at 7 months supply this month with a reduced sales pace, and about even with last year at this time at 8 months (Sect E p.3). New home supply seems to be stable. Under $100,000 New homes are at 18 months supply. The New homes in the $100,000-$400,000 price range have 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 February shows 10 months, three months better than 13 months last year. Used Active listings at 8,949 are lower than the 11,320 last year (Sect E p.3), (Sect E p.3).

Birmingham area Average Days on Market for New houses was 208 compared to last month at 215 . The Used homes DOM was 153 in February, compared with 143 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 entering the more active sales season of the year.

Average sales price for Sold New homes decreased to $240,076 from $242,347 last month (Sect A p2). Average sales prices for Sold Used homes increased to $137,881 from $135,288 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). The price of any specific home still remains under pressure.

TWB 3/16/12

33.499584 -86.755692

Posted in Absorption, Birmingham, Building Permit, Construction, Forecast, Home values, Jefferson County, Monthly comments | Tagged , , , , , , | Leave a reply

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