The sales volume in Austin fell of a cliff for November, with only 914 sales of single family homes. That represents a 43% decline in the number of homes sold. The number of “Not Solds” (expired or withdrawn) took a big jump also, to 62% of all listings that departed the Austin MLS in November. If you remember last month’s market update, I predicted the Not Solds will hit 70% in December 2008. November stats haven’t changed my mind.
Let’s look at the breakdown of Austin single family home sales for November 2008:
• Number of homes sold is down 43% (was down 28% last month) from 1,594 Nov 2007 to 914 Nov 2008.
• Average list prices in Austin were down 5.29% over the same month last year to $250,609. This means sellers/agent are doing a better job of pricing the home correctly out of the gate.
• Average sold prices in Austin were down 6.17% over the same month last year to $238,072 from $253,718 a year ago. So, list prices are down 5% but sold prices are down 6%, which tells me sellers are still chasing the market down.
• Median sold price was down 1.87% to $185,000. Last year in Nov it was $188,527. Median prices had been holding their own each month this year, so the downturn in this particular metric is something new.
• Average List to Sold price ratio is 95.00%, down from 95.89% the same month last year, again demonstrating that sellers are still chasing the market down.
• Avg sold price per square foot is down 7.41% to $109 compared to $118 a year ago in November. This is a huge drop.
• Avg days on market is up 12 days (18.75%) from 64 last year to 76 this November.
• Median days on market is up 11 days (24%) from 45 days last year to 56 this year.
• Number of “Not Sold” (exp or withdrawn) is up 43% over the same month last year, to 63% of all removed listings compared to 46% for the same month last year.
None of this is favorable if what we want is a normal, rising market, but in the context of elswhere in the country, it’s actually pretty good.
The stats outlined above are shown in the chart below.
|Austin Real Estate Sales Market Update – Nov 2008 Sales|
|Homes only (condos, duplexes, etc. not included) compiled from Austin MLS data|
|Oct 2008||Nov 2008||Nov 2007||Yr % Change|
|Avg $ SQFT||$114.53||$109.21||$117.95||-7.41%|
|Not Sold %||58.14%||62.06%||46.19%||34.37%|
So, are these grim numbers cause for alarm? Not at all, and here’s why.
October 2008, when the offers for Nov 2008 closings were written, was dominated by continued financial spiral and economic uncertainty. It’s not suprising that buyers hunkered down. Since Oct 2008 was anything but “normal”, it’s no surprise that Nov 2008 closings are down. I expect Dec will be just as slow comparatively, though the interest rate drops seem to be bringing some buyers out of the woodwork. And the Median sold price in Austin is still up 3% year to date over last year while the average sold price is down only 1%.
Let’s take a look at Austin’s Year to date sales stats:
|Austin Sales Market YTD Update – Nov 2008|
|Homes only (no condos, duplexes, etc) – Data from Austin MLS|
|Jan-Nov 08||Jan-Nov 07||Yr % Change|
|Avg $ SQFT||$117.39||$119.96||-2.14%|
|Not Sold %||44%||32%||38.08%|
So, while Nov looks pretty darned slow, and December will no doubt be the same, the year overall has held up about as good as anyone could hope. There are few cities in the U.S. who would not trade their economic numbers and real estate market for ours here in Austin.
Finally, let’s look at the November breakdown by price rance for a better understanding of which homes are selling and which are over-supplied.
|Price Range||# Sold||Avg DOM||Active||Months Supply|
|$149,999 or under||300||57||1653||5.51|
|$150,000 – $199,999||215||71||1535||7.14|
|$200,000 – $249,999||129||79||1108||8.59|
|$250,000 – $299,999||89||81||944||10.61|
|$300,000 – $349,999||45||124||604||13.42|
|$350,000 – $399,999||29||75||575||19.83|
|$400,000 – $449,999||30||121||339||11.30|
|$450,000 – $499,999||16||112||343||21.44|
|$500,000 – $549,999||11||124||216||19.64|
|$550,000 – $599,999||15||91||213||14.20|
|$600,000 – $699,999||11||81||301||27.36|
|$700,000 – $799,999||9||125||197||21.89|
|$800,000 – $899,999||7||111||133||19.00|
|$900,000 – $999,999||1||96||106||106.00|
|$1,000,000 or over||8||184||441||55.13|
What does this tell us? It tells us the the seller or buyer of a home priced under $200K is living in a completely different real estate market than the buyer or seller of a home priced above $300K. In the “below $150K” range, homes are selling in less than 60 days and we have less than a 6 month supply, even using the dismal Nov sales volume as the denominator instead of the average of the past 12 months (the other way to do it).
In a balanced market (neither buyer or seller have the economic advantage), 6 month’s inventory is considered the balance point, and home will sell in about 60-90 days, on average. Of the 914 homes that sold in Austin in November, 56% were sold for less than $200K, and a massive 80% of all homes sold in November in Austin were priced below $300K. Homes priced above $300K simply have an insufficient number of buyers to absorb the current inventory.
The “Month’s Supply” column shows the relationship between the number of active listings and the current volume of sales activity in that range. Moving down the price ranges we see the sobering reality that sellers in the higher ranges face. For example, we have a listing priced at $569K. There is a 14 month supply in that price range, with 213 other homes priced between $550K and $600K, and only 15 in that range sold last month. We’ll be riding this one out into the Spring with the seller as the showings have essentially grinded to a halt since October. In this case, dropping the price to the lower $500Ks won’t even create much of a change in foor traffic, because there simply are not enough buyers out looking for homes over $500K, so patience is the only viable option.
Likewise, a buyer qualified for up to $600K has a lot to choose from and if that buyer is flexible in their requirements, can submit agressive offers on many different homes until they find the most motivated seller. Bargain hunters looking below $250K have experienced more frustration, as it’s simply not a buyer’s market in that range.
As usual, questions and/or comments are welcome.