Huntsville Home Inventory – Hits All Time High

Michael Bertoldi - Huntsville Realtor

by michael

in Huntsville Housing Market

Inventory figures for Single Family Homes within the Huntsville Alabama Metro Area have topped 2800 units (i.e. active listings) for the first time since such figures have been recorded.

The raw inventory of real estate listings have been somewhat ‘seasonally flat‘ over the last 2 years and thus have not been a regular focus in our market updates. However with inventory levels of 2815 and 2801 units for May and June 2010 respectively, and given that this spike in levels from December’s 2229 units represents an ~18% increase in available homes for sale, our attention it has!


Surrounding Context Important

Believe it or not, the real estate inventory chart above makes complete sense, if one puts the figures in perspective with current events. During the national housing boom (2004-2007) local inventory paced ahead with a steady increase in response to demand.

However on the bust side of our nation’s financial crisis, local inventories remained relatively flat during 2007-2009. Moreover when one couples the Home Buyers Tax Credit of 2009-2010 with the  Redstone BRAC Relocation peak of 2010-2011, it becomes logical that inventory levels may rise in anticipation of these events. Thus here we are!

Absorption Rate Inventory Concerning

The raw number of real estate listings for sale is one inventory measurement, however absorption rate is another. Absorption rate inventory calculations couple inventory and sales statistics while computing inventory as a ‘Months of Supply‘ figure.

There are a number of ways to calculate this measurement since one of the components is a ‘prediction of future homes sales‘. So we will take a conservative approach using last year’s sales volumes for the next 3 months, since inventories have a normal falloff during the late fall and winter, and we will assume sales will remain flat compared to last year.

Quarterly Seasonal Absorption Inventory:
Today’s Inventory (2801)/Last JulyAugSept SalesPerMonth (310) = 9 months of supply

Nine months of (conservative) supply is where we normally begin to see price-action, so something on the supply-demand curve will likely give over the next 3 months:

  • Overpriced homes won’t sell or will be removed from the market
  • Sellers just testing the summer waters will exit the market
  • Prices may decline if significant numbers of sellers must sell

We of course are not sure which way the market will head, although we do know we are at a pivotal point; sellers may retreat or buyers may materialize. In either case you can pick up the info right here On Our Feed, because I can assure you we are watching very-very closely and will update our readers with related market events as they occur.   So stay tuned in!

– Michael


Mark April 8, 2011 at 12:20 pm

Do you have the housing inventory in accordance with asking price? It would be interesting to see a graph breaking down the number of units for sale (including) the number of foreclosures on the vertical bar and the time frame on the horzional bar. You could also reflect the rate of the number of housing units being constructed by price range and how long it takes to (sell/ get ride of the inventory). This would provide a quick reference and understanding how hard it would be to sell existing house for sale and at what price to list it. This could also help to some degree where the market is going in the Huntsville, AL, Owens Crossroads, Madison County areas. Thanks, Mark

Mark April 8, 2011 at 12:26 pm

Please define moderation. Do you mean something like, “How long does it take a builder to sell his spec house for $600,000?” Or, “How long will it take most builders to go bankrupt?

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The data relating to Huntsville AL Real Estate on this Web site derive in part from the Valley MLS IDX datashare program. © 2016 Valley MLS, Inc. All information provided is deemed reliable but is not guaranteed and should be independently verified.

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