To keep my readers informed, I provide a real estate market report periodically which is a snapshot of sales and inventory in the Greater Birmingham area. Knowing what the trends show on a macro basis can give buyers and sellers some perspective on what the trends are and how their situation and expectations stack up against what is going on around them.
This real estate market report is pretty simple in that it simply looks at inventory and sales which are the primary measures for how things are going generally. The table below shows, by month, sales and inventory history for conventional single family homes in greater Birmingham AL over the past three years (some months excluded due to space):
For each month, the available inventory of homes is divided by sales for that month to yield the actual months of inventory which is a relative measure of supply and demand. In the far right column, I have provided a 3-month moving average of months of inventory to smooth out monthly variability and provide a better barometer of economic strength.
Take a look at the green highlighted area in this real estate market report to gain a perspective on where we stand in terms of supply and demand in Birmingham. Looking at two years ago, we were at 9.15 months of inventory, last year we were at 11.50 months and now we are at 11.45 so things would appear to have stabilized. While I personally hope that to the the case, a closer look at the numbers suggests that we aren't out of the woods yet. When looking at the 3-month moving average, a differnent picture emerges. We go from moving averages of 7.90 in October, 2007 to 9.45 in 2008 and now 10.80. The moving average smooths out monthly volatility so I believe it to be a better indicator of the market's condition relative to overall supply and demand.
Now take a look at the raw data graphically portrayed in the line graph below.
This is the same data shown in the above real estate market report and paints a similar picture but also gives more insight. The peaks and valleys the past 3 years appear at almost the same times. Looking at 2009 though, shows higher peaks and higher valleys meaning overall we still appear to have supply levels exceeding demand in comparison to prior years. Hopefully for sellers, the trend more recently to rising excess inventory will slow to provide better price / value support. For buyers, undoubtedly there are still lots of choices allowing selectivity in making offers and better negotiating positions.
Of course, real estate is a highly local activity and this real estate market report is a macro-level analysis that needs to be considered in connection with all of the facts and circumstances of each proposed transaction between a buyer and seller. For information about recent sales and current listings in your neighborhood, visit free market snapshot and input your name, address and email and I'll send you this valuable report for free straight to you inbox. To search all listings in the Greater Birmingham area, visit Birmingham MLS. Whether buying or selling, having insight into market trends help in making better decisions to maximize the value achieved on each transaction.
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