Austin Real Estate Market – Feb 2009 Update
The average and median sold prices in Austin are up for February 2009. Average sold price is up 6.29% from Feb a year ago and median sold price is up 2.65% from last year. Last month (Jan 2009) you might remember sold prices had dropped about 5%. So the Austin market is “undulating” a bit, sort of like the stock market except that we’re now actually up YTD for the same period 2008 as well.
Volume of sales dropped 25% for Feb compared to Feb 2008, but that’s an improvement from the volume drop of 40% in Jan. The number of “Not Solds” (expired or withdrawn) is at 50% for February, meaning half the listings that departed the MLS were failed sales efforts. Let’s look at the breakdown of the rest of the Austin single family home sales for Feb 2009:
• Number of homes sold is down 25% (was down 40% last month) from 1,315 Feb 2008 to 989 Feb 2009.
• Average list prices in Austin were up 6.89% over the same month last year to $264,044.
• Average sold prices in Austin were up 6.29% over the same month last year to $252,132 from $237,218 a year ago.
• Median sold price was up 2.65% to $194,000. Last year in Feb it was $189,000.
• Average List to Sold price ratio is 95.49%, down slightly from 96.00% the same month last year.
• Avg sold price per square foot is up 0.18% to $114.04 compared to $113.83 a year ago in Feb.
• Avg days on market is up 12 days (18.75%) from 64 last year to 76 this November.
• Median days on market is up 15 days (20%) from 69 days last year to 83 Feb this year.
• Number of “Not Sold” (exp or withdrawn) is up 20% over the same month last year, to 50% of all removed listings compared to 42% for the same month last year. This is actually a fairly healthy drop from the 61% Not Sold ratio in Jan and the 58% in December.
Most of this is favorable, but it would be foolish to think one month means anything. We would need to see a sustained trend upward, for three months in a row leading into the summer, accompanied by better economic news nationally, before I’d get too excited about the Austin market. Still, as real estate markets go, Austin is stubborn and is hanging in there better than almost any other city in the U.S.
The stats outlined above are shown in the chart below.
|Austin Real Estate Sales Market Update|
|Homes only (condos, duplexes, etc. not included) compiled from Austin MLS data|
|Jan 2009||Feb 2009||Feb 2008||Yr % Change|
|Avg $ SQFT||$108.38||$114.04||$113.83||0.18%|
|Not Sold %||60.98%||50.00%||41.76%||19.72%|
The year to date chart is below, showing how we’re doing through Feb 2009 compared to Jan-Feb 2008.
|Austin Sales Market YTD Update – Feb 2009|
|Homes only (no condos, duplexes, etc) – Data from Austin MLS|
|Jan-Feb 09||Jan-Feb 08||Yr % Change|
|Avg $ SQFT||$111.66||$114.22||-2.24%|
|Not Sold %||55%||44%||25.39%|
I was expecting 2009 to be a year in which our prices in Austin slide 3% to 5%. January came out of the gate with 5% drops on median and average prices, but the market rebound in February has us actually UP YTD through Feb 2009. I’m not going to hazard a firm guess about March, but Sylvia and I have personally seen an uptick in activity compared to January and Feb, and I’m hearing the same from other agents in the office.
And as I wrote in the January update, “smoking hot” deals are not very easy to find. Many of the builders are now raising base prices on “to be built” homes, though still offering agressive discounts on spec homes, of which there are very few though. Nationally, we know it takes over a million new housing units a year just to keep up with “family creation” that results from migration and births, and we’re now producing only about one third of what is needed. Austin is in a similar situation, as the builders have pulled back so far that we’ll probably see a housing shortage and price boom in a couple of years as supply falls short of demand.
On a side note, we closed a deal Friday where our buyers had an interest rate below 5% and will be receiving an $8,000 tax credit on their 2008 tax return now, which represents about 5% of the sales price on the home being rebated by the government. The buyers are elated. Sorry, but nobody can convince me that these buyers should have remained renters, sitting on the sidelines trying to “time” the market while they wring their hands and worry about the economy. No, they are very smart and they’ve done the right thing, which is find a great deal and buy it.
Back to the stats, below is a breakdown of Feb sales by price range.
|Pricing and Inventory Analysis for Austin Homes Feb 2009|
|Price Range||Number Sold||DOM||Active||Months Inventory|
|$149,999 or under||273||63||1,666||5.46|
|$150,000 – $199,999||241||68||1,501||5.89|
|$200,000 – $249,999||145||95||1,093||7.94|
|$250,000 – $299,999||115||89||1,009||10.44|
|$300,000 – $349,999||53||98||630||9.55|
|$350,000 – $399,999||48||113||629||13.88|
|$400,000 – $449,999||27||109||379||13.54|
|$450,000 – $499,999||21||122||374||21.58|
|$500,000 – $549,999||15||99||203||15.62|
|$550,000 – $599,999||8||97||231||28.88|
|$600,000 – $699,999||19||138||330||22.00|
|$700,000 – $799,999||5||121||219||31.29|
|$800,000 – $899,999||4||97||174||40.15|
|$900,000 – $999,999||1||257||95||47.50|
|$1,000,000 or over||14||169||514||37.61|
Note above the far right column, which tells us the months of inventory for that price range. 6 months is considered a balanced market where neither the buyer or seller have the advantage. More than 6 months is a buyer’s market, less than 6 month’s moves into seller’s market territory. Really, a range of 5 to 7 months is the balanced range. So, if you’re a buyer looking in a price range below $200,000 in Austin, you can see that it’s a balanced market, which is why it’s not necessarily that easy to go out and find a “steal” in that price range.
Notice how the inventory jumps up to eight months at $200K-$250K, and up to 10+ months for the rest of the price range chart. If you’re a seller priced above $350K, this is a tough set of numbers to be looking at. You either need to get serious about selling your home, or pull it from the market. Look at the $900K range (where we just walked away from a listing because the seller refused to acknowledge these numbers). Last month, ONE home sold in the $900K-$1M range – ONE home, and there are 95 currently listed in that range. Which one of the 95 Austin homes priced at $900K do you think will be the next to sell? It ain’t gonna be the over-priced ones, that’s for sure. Yet so many sellers think there is something “special” about their particular home. The only “special” attribute that matters is price and condition. Those are the factors you can control. Get real, or get off the market. The numbers can’t be ignored.
Finally, I’ve updated my YTD historic Austin sales graph, which had an ugly dip for 2009 last month but now looks a lot different. Don’t bet on it staying the same for next month, it could dip again or go up. I’m leaning toward an uptick just based on what I am seeing and hearing, but it’s anybody’s guess in this economic environment. As usual, comments and observations are welcome.