Using graphs to see trends in real estate sales activity can help you understand exactly what is going on in a market. Within the Birmingham, Alabama real estate market there was good news in 2012; we finally saw a steady increase in the median sales price of homes. Each sub-market is different but I was interested in seeing what was happening to sale prices in the overall Birmingham metro area. To get a better perspective on where we were, and how far we’ve come I decided to go back in time to and look at data from 2009 to 2012. The median sale price is the best statistic to look at because it is not effected by the highs and lows as much as the average sale price is, so I decided to go with it. Here’s what the graph looks like:
It’s interesting to see trends within the market at different parts of the year. The median sale price has its normal ups and downs but if you look closer you can see an overall trend of lower prices at the beginning of the year, then a rise towards the middle, and then dropping off towards the end of the year. Inventory levels have a pronounced cycle to them as well. What is very interesting is to see what happens in 2011. Each year there is a rise in inventory near the second quarter of the year, but rather than shooting back up like it did from 2009 to 2011 inventory levels started to decline after the peak around March of 2011. They started to drop, and hit a low spot around the beginning of 2012. It did rise somewhat after that until June/July of 2012 but then started dropping again. This decrease in inventory had a huge impact on the median sales price. From January of 2012 to present, median sales prices have increased steadily. It peaked around mid year of 2012 at a point that had not been seen since the middle of 2009. The lack of inventory in some areas has made it a sellers market. This may be short lived because with the beginning of 2013 sellers will see that property prices are rising, and if they enter the market to sell there home it may dampen further price increases. Only time will tell how 2013 will pan out.
Is this happening in your market? If not what type of activity do you see? As I said, all markets are different so yours may not be performing like this. In fact, certain parts of the Birmingham market may be different as well. This information reflects the entire Birmingham market, spanning all property types and price ranges. I would be interested to here about your area if you are located in a different part of the country.
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Nice graph, Tom.
Thanks Ryan.