Limestone County Real Estate sales improving

Local home sales recovering

By Karen Middleton 
karen@athensnews-courier.com 

Local home sales are not showing the 11-percent rise seen nationwide, but one Realtor said sales are improving.

Patsy Gooch, president of the Limestone County Realtors Association, said Monday, “We’re still down below last year, but we’re looking up,” Gooch said.

According to the National Association of Realtors, U.S. home sales rose by the largest amount in more than eight years in June. Officials take this as a sign the housing market is recovering from the worst downturn since World War II.

“This quarter, we sold a total of 215 homes in May, June and July,” Gooch said. “This is 39 units down from the 254 we sold in the same time last year.”

Nationwide, sales have risen for three-straight months with the median sales price of $206,200, which was down by 12 percent from last year’s $234,300.

According to the National Association of Realtors, the median sales price of a home in the South is $159,300.

“We’re improving but we’re not back to where we were,” Gooch said. “The Athens and Limestone County real-estate market remains very sound. While we are down from the previous year, I believe our figures still reflect a healthy market and are in line with seasonal sales.

“We are so encouraged by what’s happening nationally in home sales,” she said. “All of our Realtors have stayed very positive and we all feel we will recover very soon.”

 

Huntsville Alabama Real Estate Market Conditions…..

Huntsville/ North Alabama Area MLS Statistics for Huntsville, Alabama Residential Real Estate Market June 2009

Huntsville/North Alabama Area MLS Observations Huntsville, Alabama Residential Real Estate Market June 2009:

1st Half	Total $ Sales	Total Unit sales	New Unit sales	Used Unit sales
2008	888,461,742	5263	1166	4097
2009	649,986,157	3971	774	3197
% difference	-27%	-25%	-34%	-22%

The 1^st Half numbers pretty much speak for themselves.

Huntsville, North Alabama market was fairly strong in June as is expected in the traditionally strongest sales month of the year. This pattern still shows continued weakness in the overall market as the sales levels for the last three months are below the 2004 levels. June total dollar sales were $139,611,384, 17%, higher than last month’s $119,033,523, and 22% below last year’s level of $178,948,964 (A  4).

Total unit sales increased from 715 in May to 804 in June, an increase of 89.

New sales increased from 136 homes last month to 150 this month, an increase of 14.

Used sales increased from 579 homes last month to 654 this month, an increase of 75 (E  3).

Unfortunately the slight trend down in absolute numbers of used homes for sale seems to have stalled at a fairly high number. Used homes are 12 months of inventory in all price ranges. The inventory situation remains challenged in the higher price ranges. Used homes over $200,000 are now at over 17 months of inventory, and in some price ranges as much as 4 years of inventory.

New houses over $400,000 are over a year’s worth of inventory, and in some price ranges over four years of inventory. (E-1). There still remain 1,593 New homes for sale, slightly less than double what would have been normal prior to 2006 (C-1). I have noted on the web site what seems to be a large number of housing permits issued, given the market conditions. To examine it a bit of detail: In Huntsville city for New homes, active inventory was 514 homes; we showed 51 homes sold, 89 new listings (June) and 82 new single family housing permits issued (May), So new listings ran 1.75x sales and permits 1.6x sales.

Total Active listings decreased by 6% this month at 8,309 compared to last month at 8,828 (A 4 and E-3). New houses New listings ran almost 2 times the rate of sales (B 1). Active New listings decreased from 1,918 last month to 1,593 this month, down 325 (Page E-3). Since there were only 145 new homes sold and 271 new listings, there was an unusual number of listing cancellations, and expirations (415!) which will probably come back to market; I noticed a large number of these for the top three builders in the area. Active Used listings decreased from 6,910 last month to 6,716 this month, down 194 (E-3).

Given the high number of homes for sale (over 7,500), the BRAC realignment will not cure the market, particularly in light of other employment problems. What banks are funding construction?

Absorption for New homes improved a bit at 11 months of inventory in June. This is a deterioration of 1 month from last year at this time. See Section E page 8. Absorption for Used homes was 12 months of inventory in June same as last month. This is a deterioration of 3 months from last year’s level at this time (E  8).

Average Days on Market for Sold New houses was 170 days vs. 139 days last month, with Used at 124 vs. 118 last month. (See Section A Page 18). Contrary to some belief, this increase is a good sign, since buyers are buying homes that have been on the market for a long time scooping up some of the older listings.

Average sales price for Sold New homes was $246,642 vs. $230,984 last month. (A 2)

Average sales price for Sold Used homes was $156,903 vs. $151,329 last month. (A 2)

The mix of higher and lower priced homes is jumping around quite a bit so it’s hard to read too much into average prices. However it is worth noting that the average price 12 month moving averages are all pointing down.

Home Construction Outpaces Home Sales….

Real estate news and notes from the week:

Monday’s report on home sales was good news to local Realtors, who saw a 26 percent jump in home sales between April and May. One month does not a trend make, but any uptick is good news in a national market that continues to languish.

One real estate expert agrees the Huntsville market is faring better than others, but he also offers a cautionary note.

Tom Brander, a principal in Birmingham-based Rudulph/Brander Real Estate Statistical Reports (tombrander.com), collects data from multiple-listing services throughout Alabama, including the Huntsville-area MLS, which includes eight counties in North Alabama and a small part of southern central Tennessee. Rudulph/Brander supplies market data to the banking and building industries.

Brander says he’s surprised by the level of new home construction going on in the market, particularly in Madison County, when inventory levels remain high. According to the Huntsville Area Association of Realtors, 111 new homes were sold in Madison County last month; builders pulled permits for 187 new homes (reported by the Huntsville/Madison County Builders Association), making the construction rate for new homes about 1.7 times that of the sales rate.

Brander’s numbers differ slightly: He reports 82 new homes sold in Madison County, making the construction rate about 2.3 times the sales rate.

Here’s where both the local Realtor’s association and Brander agree: The bulk of current sales are for lower-priced, used homes. Indeed, in Madison County alone, more than 85 percent of the homes sold in May were under $300,000, as more first-time buyers take advantage of the tax credit to buy homes in their price range. Higher-priced homes typically are purchased by homeowners who are “moving up” into a larger, more expensive home and have equity in their first home.

“By any measure you’ve got, once you slice out anything under $200,000, you’re well over two year’s worth of inventory based on historical sales, which (the market) is now under,” Brander said. “The used market is killing the new market. New homes are being built much more quickly than they are being sold.”

He notes that current sales levels in the Huntsville market are running under 2004 sales levels, and more than 7,000 homes sit for sale throughout the eight-county region.

“If 100 percent of the BRAC jobs move here, and all of the additional jobs expected, it still won’t absorb all the homes for sale,” he said. He also noted that defense budget cuts reported recently could lead to hundreds of jobs lost in North Alabama. Oscar Gonzales, executive director of the local Realtors association, said he disagrees.

“There’s typically a 12- to 18-month lead time for new construction,” he said. “With what we’re hearing from the chamber (of commerce) and in informal conversations, I’m confident that the new construction will be absorbed. You have to have things in the pipeline.”

Huntsville grows fastest in state

UA says city gained 18,429 since 2000; BRAC to rev it up

MONTGOMERY - Riding the wave of an economy tied to the military and its entrepreneurial offspring, Huntsville far outpaced Alabama’s three other major cities in population growth the past eight years, according to a new report.

The University of Alabama’s State Data Center reported Thursday that Huntsville’s population jumped from 158,216 in 2000 to an estimated 176,645, a gain of 18,429.

Huntsville’s growth is expected to ramp up even further once BRAC is fully implemented and an additional 17,000 people move into the area over the next three years, Mayor Tommy Battle said.

Birmingham and Mobile lost population, while Montgomery had modest growth, according to the estimates released Thursday by the U.S. Census.

Although Birmingham remains Alabama’s largest city, it lost 14,022 residents to drop to a population of 241,820. Montgomery gained 1,120 to hold second place at 202,696, while Mobile lost 7,893 residents to drop to 191,022.

Dr. Keivan Deravi, an economist at Auburn University Montgomery, said it’s no surprise that Huntsville is running away from the rest of the state in population.

“If you took Huntsville and looked at it as a state, it would be one of the best states in the U.S.,” he said. “They’ve done a fantastic job with Cummings Research Park, a fantastic job with their airport, a fantastic job with the Space & Rocket Center, and its education system is far better than average.”

And Deravi said Huntsville has created momentum for the future with BRAC, short for the Base Realignment and Closure Commission, which recommended moving several military commands and nearly 5,000 defense jobs here by 2011. Thousands of contractor jobs are expected to follow.

Battle said Thursday that Huntsville’s economy has also diversified beyond Redstone Arsenal and NASA to include the HudsonAlpha Center for Biotechnology, Toyota’s engine plant and numerous health care offerings that make Huntsville the regional medical center for North Alabama.

We’ve been very fortunate in our growth pattern and our diversification,” he said.

Joe Vallely, Huntsville’s director of economic development, said the study didn’t surprise him because the city has led the state in job creation in 15 of the past 18 years.

Vallely said Huntsville has seen its population grow in years when job growth was down. He speculated that people moved from surrounding counties to be closer to their jobs in Huntsville, or were “probably chasing the best school systems.”

The city of Madison gained 9,385 new residents to increase its population from 29,329 to 38,714.

Annette Watters, manager of UA’s State Data Center, said the estimates from 2000 to July 1, 2008, do not take into account the severe downtown in the economy that began affecting the nation and the state later in 2008.

But she said the statistics show that many Alabamians seem to be returning to smaller towns.

For example, Auburn, which was recently selected by U.S. News & World Report as one of the nation’s 10 Best Places to Live, gained 13,101 residents since 2000 and now has an estimated population of 56,088.

Deravi said people generally view larger cities as places to work, not to live.

“You have that situation here in Montgomery County where Autauga County is one of the fastest growing counties in the state,” he said. “It’s not because there’s something really good in Autauga County, it’s because something’s really not going right in Montgomery.”

Deravi said people are drawn to suburbs or smaller cities because major cities are failing to provide safety and quality education.

“For us to shop in Birmingham, we don’t have to live in Birmingham,” he said. “Huntsville is different because it’s the magnet.”

Over the decade, Watters said, the state has grown 4.8 percent.

“The past is not always a predictor of the future,” she said. “Growth can bring entirely new sets of problems, and not every town aspires to be Huntsville.”

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