[Article via AL.com]
Demand: Alabama new home sales in May increased 7.4 percent from last May. Consistent with seasonal trends, sales also increased by 29 units or 9.5 percent from the prior month.
Supply: New construction inventory increased 5.7 percent from May 2014. Three of five metro areas experienced decreases in inventory from last May with the exception of Tuscaloosa (up 4%) and Birmingham (up 18%).
Alabama’s metro markets (appropriately 70% of the statewide market) in May reflect 5.1 months of new home supply, favorably down 1.9 percent from last May’s 5.2 months and down 13.6 percent from 5.9 months last month.
Pricing: Alabama’s metro market’s median new home sales price in May was $244,742, an increase of 6.9 percent from last May and 2.2 percent above last month.
New Home Pipeline: May statewide housing starts increased by 4.0 percent from May 2014 and improved .4 percent from the prior month. 2014 starts were down 2.0 percent. Housing starts were up 7.8 percent in 2013 and 6.5% in 2012. Statewide building permits in May were up 4.7 percent from May 2014 but down 2.4 percent from last month. 2014 permits were down .8 percent. Building permits were up 5.6% in 2013 and 8.4 percent in 2012.
Residential Construction Employment: According to the Alabama Dept. of Industrial Relations, statewide residential construction employment in May increased 1.2 percent (800 jobs) to 65,500 from the same period a year earlier but slipped .9 percent (-600 jobs) from last month.
Local Results: 9 out of the 27 home builder associations (33% – down from 44% in April’15) reported gains in building permits from the prior month while 15 associations (56% – down from 59% in April’15) reported gains in housing starts from last month. Eighteen associations (67% – up from 59% last month) experienced an increase from their May 2014 housing starts.
Industry Perspective: From David Crowe, NAHB chief economist:”The Housing Market Index (HMI) indices measuring current and future sales expectations are at their highest levels since the last quarter of 2005, indicating a growing optimism among builders that housing will continue to strengthen in the months ahead. At the same time, builders remain sensitive to consumers’ ability to buy a new home.”