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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