Looking back at 2009…

Good News: Total Birmingham area home sales increased by 46% in November 2009 compared to November 2008. Total November sales were 879 compared to 603 in November 2008.

This significant increase in total sales can be attributed to what was happening one year ago with the presidential election and the Wall Street crisis. Congress had just moved to bail out financial institutions. Home buyers became jittery by all the uncertainty and dropped out of the market in droves.

As we consider economic conditions from a year ago it is encouraging that November home sales have increased.

More Good News: The median price in the Birmingham area increased by 4 percent in November 2009 compared to November 2008. The November median price was $145,000 compared to $139,900 in November 2008.

Residential inventory continues to drop. Current levels are 26 percent lower than the highest ever recorded back in August 2007. Also note inventory is at lowest point since May 2006.

Local Inventory Levels have begun to reduce.

To summarize, it appears that we may have reached the bottom of the real estate market. This is further signaled by the doubling of investor transactions occurring in the third quarter. At this point improvements have been modest and it is unlikely that further improvements will be more aggressive. However, as the market does improve interest rates are likely to rise decreasing overall housing affordability. Or perhaps more succinctly: It appears 2009 was the beginning of the end of the real estate market crisis while 2010 looks to be the beginning of the recovery, albeit a slow one.

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