We took a look at the entire Pelham, Alabama market with the last blog post I wrote. Today we are going to narrow things down a bit to the subdivision level and even a certain style of home. Of the 222 sales that occurred in Pelham, AL from 12/15/2010 to 12/15/2011, 59 sales occurred in the Ballantrae subdivision. I have written about Ballantrae in the past because even with the downturn in the market there is still some new construction occurring here. The neighborhood offers a variety of home prices and styles and many of the homes are located on the golf course.
By narrowing the search criteria down even more you can see that there is a relatively strong market for garden style slab homes ranging in price from $171,450 to $310,000. This type of home accounted for 46 sales, of which 8 were either short sales or foreclosures. That is approximately 17.4% of total slab home sales within Ballantrae in the past year, well below the overall Birmingham average of 30-40%. At the time of this writing the Birmingham Multiple Listing Service indicated that there were 15 listings of similar slab homes for sale. We can look at these figures and calculate what the absorption rate is for slab homes within the Ballantrae subdivision.
Active + Pending = 15 homes (current inventory)
46 sales / 12 months = 3.83 homes sold per month (rate of sales over last 12 months)
15 / 3.83 = 3.90 months of inventory
This is quite a bit less than the 8.7 months of inventory that we calculated for the entire city of Pelham and shows you that it is important to segment the market when looking at sales and listing statistics. With 3.9 months of inventory the market for slab homes in Ballantrae is on the edge between being balanced and a sellers market. This would be important information to consider when determining an asking price. It would help a seller understand what type of market there was for homes similar to theirs. Take a look at the video below to find out how knowing the absorption rate can help you.
Do you have a question about another area of Pelham that I could help you with?
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Great job Tom with the video. This is something that I’m going to have to work more with.
Thanks Michael. One of my business resolutions for 2012 is to do more videos. Hope you have a great 2012!
Is there much of a discount for distressed sales (short sales and foreclosures) in this county? I’m curious. Nice looking house.
Great question Ryan. I’m sure there is but not sure the numbers for the county, however within the Ballantrae subdivision the distressed sales are selling for about 12% less than non distressed sales. The picture in the post is the Ballantrae Golf Clubhouse, within this neighborhood.
Good observation, I would ad a caution about getting too granular.. i.e getting too specific, at that point you start loosing the power of statistics and run the risk of searching for the answer you want. I submit that houses in a similar pr ice range compete with fairly broad geographic areas.. But certainly Ballantrae has performed well.
Thanks Tom. I agree with your point about searching for the answers we want. That is so true and it can be dangerous in areas where there is not a large sample size, and the statistical results are not reliable. This has been an issue lately because of the reduction in sales volume. I chose Ballantrae because it appears to have been the spot with the most sales in Shelby County last year and the results from that area were more meaningful than other areas with less volume.