June 2009
Huntsville Real Estate Prices Spike Upward
June and July are seasonally the strongest months of the year for Huntsville Real Estate prices and this year appears to be shaping up as no different. While mentioning this seasonal factor in our last 2 monthly price updates and predicting that average sale prices would likely move upward and break through their 12 month moving average, we were surprised by the strength of the move this month.
Average prices per-square-foot showed a 3.4% increase in June when compared to the previous month of May, yet remained -2.2% below June 2008 levels. While prices are still moderately lower year-over-year, they have been averaging in the -3.5% range thus this months performance has seemed to narrow the gap and was strong enough to begin tugging the moving average upward, as can be seen in the accompanying 4 yr price chart.
Average Price Per Square Foot
The Market Mix Price Divergence
The big contributor to this month’s performance is a resurgence of the upper end market of homes valued above $300k. Last month these homes accounted for 16.3% of sales while this month this same market segment amounted to 25.3% of sales which is actually a 3% greater percentage of the market than in June 2008.
This market shift is thus creating an anomaly in median home prices which of course can move up abruptly within such a market shift and these average prices show a 7%-11% price increase year-over-year while the much steadier average price-per-square-foot is still indicating a moderate price decrease across the board as exemplified in the following table.
Average Price Per Square Foot
| % of Sales | Price 06/08 | Price 06/09 | %Change | |
| 0 – 150k | 28.2% | $71 | $64 | -9.9% |
| 150k-300k | 46.5% | $97 | $96 | -1.0% |
| 300k-450k | 19.0% | $111 | $106 | -4.5% |
| 450k-up | 6.3% | $147 | $137 | -6.8% |
| All | 100% | $93 | $91 | -2.2% |
The Underling Cause
Much of the summer seasonality of real estate can be attributed to school schedules. Families wishing not to disrupt their children’s school year tend to relocate, move across town, or simply upgrade their home during the summer school break.
Thus while this past winter and early spring our market was dominated by first time home buyers this does not appear to be the case this past month, where move-up and relocating families coming into town for employment reasons, have asserted themselves into the market mix with a notable impact on average home prices.
