Birmingham Traditional and Sheriff Sales Activity Drops

The volume of Birmingham homes sold traditionally and through sheriff sales declined in February as revealed in the latest report from the Birmingham Association of Realtors. The decline mirrors national sales activity.

During the said month, only 596 homes were sold; 7 percent fewer than last years. Of the total, 43 percent involved foreclosure homes in Birmingham. This should not come as a surprise, considering that there is presently a large volume of bank foreclosures for sale in the market as a result of the mortgage collapse, growing unemployment rate, and declining home values.

Meanwhile, average home price increased to $160,385, which is 7 percent more than a year ago. Median home price, on the other hand, dropped by 1 percent and is now at $130,000. As for the average sale price of foreclosure houses in Alabama, particularly in Birmingham, the amount was recorded at $84,761. Traditional home sales price, on the average, was at $216,937.

Inventory of local homes, even those scheduled for sheriff sales, also dropped by 9 percent to 9,550. To date, total home sales activity is 8.5 percent less compared to January and February 2010 combined. Average home price, for the said period, was recorded at $162,300.

According to the report from the National Association of Realtors, national sales activity of existing houses, which include foreclosure homes, declined by 2.8 percent compared to January of this year and 9.6 percent in the past year. Sales activity in the South was unchanged.

Other states hit hardest by the foreclosure mess are experiencing a similar trend. Home sales activity has declined as a result of a combination of factors. For starters, the winter months are usually slow and there is also the tax credit, which boosted, albeit artificially, the first half of last year’s sales activity.

Another factor would be the entry of new listings, including those already scheduled for sheriff sales. Most inventories of homes for sale have experienced a lull when lenders slowed down their foreclosure process to avoid any more controversies, such as the one last year where so-called robo-signers were involved. And as these lenders slowly work their way through their pile of foreclosure paperwork, experts believe more repo homes will enter the market. When this happens, home values will most likely be dragged down and more homeowners will find themselves with underwater mortgages. The only good news is that short sale transactions are becoming popular even with lenders and could be the best way out for the underwater borrowers.