May new home sales in Alabama’s five metro markets, representing approximately seventy percent of all statewide transactions, experienced a 13.9 percent increase from the prior month. Sales also improved 4.9% compared to May 2011. Year-to-date (YTD) through May, Alabama new home sales are up 9.6 percent.
Sixty percent of metro areas have experienced YTD increase in new home sales from compared to 2011 with Montgomery (up 49%) posting the best results followed by Tuscaloosa (33%) and Birmingham (11%). YTD new home sales have declined in Mobile (down 22%) and Huntsville (down 1.1%).
Demand: In May, Alabama new home sales were outpaced the US market which reflected an increase of 19.8 percent from May 2011 and 7.6 percent from the prior month, according to the US Census Bureau & HUD. The release also reported that the results from the South region were up 16.6 percent from May 2011 and 12.7 percent from last month.
Supply: Statewide new construction inventory has declined by approximately 12 percent from last May which is consistent with US trend (down 24%). All metro markets have experienced reductions in inventory since May 2011 with the exception of Mobile (up 2%). Tuscaloosa (down 21%) and Birmingham (down 16%) lead the state in inventory reduction.
Alabama’s metro markets in May reflect 4.9 months of new home supply, a significant improvement from 5.9 months of supply in May 2011. According to the US Census Bureau, the US inventory of new homes for sale decreased to 145,000 homes or 4.7 months’ supply, also a big improvement from 6.6 months of supply in May 2011.
Pricing: Alabama’s metro market’s median new home sales price in May was $209,545, a decrease of 1.6 percent from last month but an increase of 10.6% when compared to May 2011.
New Home Pipeline (see graph): May statewide housing starts increased by 9.7 percent from the prior month and increased 19.4 percent from May 2011. May statewide building permits were also up 6.2 percent from the prior month and 20.7 percent from May 2011.
Residential Construction Employment: According to the Alabama Dept. of Industrial Relations, statewide residential construction employment was up 3.6 percent (2,100 jobs) to 60,700 from last month but remains down 8.6 percent or 5,700 workers from May 2011 (but the year-over-year % change continues to narrow).