Alabama New Construction Report August … · 2010-10-06 · Permits have also decreased 7.8...

www.acre.cba.ua.edu Alabama New Construction Report – August 2010 Monthly Indicator Recent Figures Trends © 2010 ACRE All Rights Reserved Local During the month, 8 out of the 27 associations (30%) reported improvements from their August 2009 building starts. Seven associations (26%) experienced increases from their July 2010 housing starts, including Athens/Limestone HBA (6.9%), Chilton County HBA (100.0%), Greater Gadsden HBA (62.5%), HBA of Metro Mobile (5.4%), Jackson County (50.0%), Muscle Shoals (45.5%) and St. Clair County HBA (22.2%). Despite the recent retreat, YTD housing starts for Alabama through August 2010 have increased by 5.4% compared to the same period in 2009. If starts continue to decline at the current pace during the 4 th quarter, we can anticipate a lower favorable percentage change for 2010 as a whole. Permits August ‘10 figures show a decrease of 25.7 percent from August ’09. Permits have also decreased 7.8 percent from July ‘10. The YoY decline of housing permits this month (665 from 895) represents the 4 th consecutive decline after a six-month favorable growth period which began back in November 2009. Year-to-Date starts are up 5.4% from last year despite the recent retreat in monthly housing starts. Starts Building starts for August ‘10 experienced a decrease from the prior month (July ’10) of 6.7 percent and were 23.4 percent lower than August ‘09. State August statistics indicate a continuing retreat in housing starts that appears consistent with current market conditions. New home sales in our five metro markets decreased by 23% compared to last August. Sales versus the prior month were up 22% but the favorable change is primarily due to a very low July sales figure. Overall inventory remains consistent with prior months, marked by a slight 1.8% decrease from July. Statewide new construction supply is currently estimated at 3,100 units, a decline of 23% +/- from last August. According to McGraw-Hill, residential contract values decreased by 9% in August ‘10 versus August ‘09 to $264 million, consistent with August ‘03 @ $263 million (August 10-year average = $306 million). YTD residential contract values are up 9% from last year. Alabama construction employment was down 0.1% to 87,800 from last month and is down 2.8% or 2,500 workers from August ’09. Elevated statewide unemployment figures (although improving), competition from distressed existing home inventory, and lack of ability to finance new production continue to challenge our new construction market. Short-term concerns include continued supply/demand imbalance, the slowing of the national GDP resulting in economic uncertainty, and the recovery effort along our coastal region. August 2010 665 July 2010 721 <7.8%> August 2009 895 <25.7%> August ’07-’09 1223 <45.6%> Current Month vs. Prior Month vs. Last Year (YoY) vs. Last 3 Year Avg. August 2010 711 July 2010 762 <6.7 %> August 2009 928 <23.4%> August ’07-‘09 1302 <45.4%> NOTE: This representation is based in whole or in part on data supplied by the reporting municipalities/boards/associations. ACRE does not guarantee and is in no way responsible for its accuracy. Current Month vs. Prior Month vs. Last Year (YoY) vs. Last 3 Year Avg. Commentary 1

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Transcript of Alabama New Construction Report August … · 2010-10-06 · Permits have also decreased 7.8...

www.acre.cba.ua.edu

Alabama New Construction Report – August 2010

Monthly Indicator Recent Figures Trends

Local During the month, 8 out of the 27 associations (30%) reported improvements from their August 2009 building starts. Seven associations (26%) experienced increases from their July 2010 housing starts, including Athens/Limestone HBA (6.9%), Chilton County HBA (100.0%), Greater Gadsden HBA (62.5%), HBA of Metro Mobile (5.4%), Jackson County (50.0%), Muscle Shoals (45.5%) and St. Clair County HBA (22.2%). Despite the recent retreat, YTD housing starts for Alabama through August 2010 have increased by 5.4% compared to the same period in 2009. If starts continue to decline at the current pace during the 4th quarter, we can anticipate a lower favorable percentage change for 2010 as a whole.

Permits August ‘10 figures show a decrease of 25.7 percent from August ’09. Permits have also decreased 7.8 percent from July ‘10.

The YoY decline of housing permits this month (665 from 895) represents the 4

consecutive decline after a six-month favorable growth period which began back in November 2009.

Year-to-Date starts are up

5.4% from last year despite

the recent retreat in

monthly housing starts.

Starts Building starts for August ‘10 experienced a decrease from the prior month (July ’10) of 6.7 percent and were 23.4 percent lower than August ‘09.

State August statistics indicate a continuing retreat in housing starts that appears consistent with current market conditions. New home sales in our five metro markets decreased by 23% compared to last August. Sales versus the prior month were up 22% but the favorable change is primarily due to a very low July sales figure. Overall inventory remains consistent with prior months, marked by a slight 1.8% decrease from July. Statewide new construction supply is currently estimated at 3,100 units, a decline of 23% +/- from last August. According to McGraw-Hill, residential contract values decreased by 9% in August ‘10 versus August ‘09 to $264 million, consistent with August ‘03 @ $263 million (August 10-year average = $306 million). YTD residential contract values are up 9% from last year. Alabama construction employment was down 0.1% to 87,800 from last month and is down 2.8% or 2,500 workers from August ’09. Elevated statewide unemployment figures (although improving), competition from distressed existing home inventory, and lack of ability to finance new production continue to challenge our new construction market. Short-term concerns include continued supply/demand imbalance, the slowing of the national GDP resulting in economic uncertainty, and the recovery effort along our coastal region.

August 2010 665 July 2010 721 <7.8%> August 2009 895 <25.7%> August ’07-’09 1223 <45.6%>

Current Month vs. Prior Month vs. Last Year (YoY) vs. Last 3 Year Avg.

August 2010 711 July 2010 762 <6.7 %> August 2009 928 <23.4%> August ’07-‘09 1302 <45.4%>

NOTE: This representation is based in whole or in part on data supplied by the reporting municipalities/boards/associations. ACRE does not guarantee

and is in no way responsible for its accuracy.

Current Month vs. Prior Month vs. Last Year (YoY) vs. Last 3 Year Avg.

Commentary