Slow down before the storm? I've seen this in my neighborhood, people bought and moved in house but having hard time selling old home out west.
By GINA HANNAH
Times Business Writer
gina.hannah@htimes.com
Building permitsalso have droppedby 43 percent
Existing home sales in the Huntsville area dropped more than 24 percent during the first three months of 2008.
During the first quarter, 999 homes sold in the Huntsville market, down from 1,321 for the same period last year, according to the North Alabama Multiple Listing Service for Madison, Limestone, Jackson, Marshall and Morgan counties.
March saw the largest drop, with home sales plunging 27.3 percent, from 542 in March 2007 to 394 this year.
Tommy Adams, owner and broker at Rise Real Estate, blamed the drop on several factors, including tighter mortgage lending guidelines, higher gas prices and the deflated housing market elsewhere.
"People coming here can't sell their houses back home," said Adams, who has been selling homes in the Huntsville market for more than 30 years, including the late 1970s, when mortgage interest rates were 18 percent.
It's a buyers' market right now. A couple of years ago, homeowners trying to sell a house often got multiple offers, Adams said. Now, "we're overbuilt. With a lot of inventory on the ground, it's working us to death because people want to look at so many houses," he said.
"The selection is tremendous."
While investors have snatched up houses to flip and builders laid footings for new homes in anticipation of more than 4,000 Pentagon job transfers, "there have not been as many (moves), not as fast as expected," Adams said. "All the builders went out and built three or four extra houses, and now we have a glut."
The first-quarter sales numbers reflect national trends: For February, the most recent report available, sales dropped 19.4 percent from the same month last year, from 387,000 homes to 312,000, according to the National Association of Realtors. Existing home sales for March will be released April 22.
New construction
According to the Huntsville/Madison County Builders Association, housing permits in Madison County dropped from 910 in the first quarter of 2007 to 516 in the same quarter this year, a decline of more than 43 percent.
John Allen, president of Southern Construction & Design Inc., a custom builder and president of the builders association, said he right now is the "calm before the storm," when more defense jobs will move here during the next few years. He said the drop in permits could be because of a number of factors, including weather and the pace of large "production builders" that have been putting up homes here.
Allen estimated that there's now an inventory of about 3,400 new homes on the market, and about 15,000 total jobs expected to land here, including defense contractors and peripheral support jobs.
"We're going to be very busy," Allen said.
Joe Murphy, a real estate developer who also collects housing data for MarketGraphics Research Group, said his data show Madison County had 872 new home permits during the first quarter. He was unsure why his numbers differ from those of the builders association.
He said the Huntsville area housing market is "amazingly strong" and there's a good possibility that building won't be able to keep up with demand in a couple of years.
"Last fall showed some overbuilding, but sales are up and inventories are down and shrinking," he said.
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Word has it that Decatur currently has trouble delivering services such as water and sewer to areas that are already in its city limits. The city doesn't have the money to go through the long process (due to environmental constraints) of extending the full service of utilities east of Wheeler NWR to the Hickory Hills and Burning Tree areas near Priceville.
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