Average rents in Austin have taken a slight dip for the first quarter of 2009. The number of rented homes is up 11% over the same three months a year ago, no doubt due to the fact that many sellers are opting to rent instead of dropping prices below their bottom dollar. This creates additional rental inventory, which gives renters more homes to choose from, and prevents prices from increasing.
Personally, I’ve leased 4 or 5 homes in the past 2 months, and the market is really spotty. One house I leased central received 4 applications in 2 days. Another one I leased north central leased immediately for $1,650 a year ago, but took about 45 days to lease for $1,595 this year. Another one in Western Oaks leased for $1,550 (same amount as last year) in about a week. A different home in Western Oaks, also listed at $1,550, and newer and in better condition, has not received any showings in more than a week. It’s not an easy market to predict right now, much like the sales market.
The stats chart is below, followed by the 1999-2009 Austin leasing history graph.
|Austin Real Estate Rental Market Update Q1 2009 Jan-Mar|
|Houses only (condos, duplexes, etc. not included) compiled from Austin MLS data|
|Oct-Dec 2008||Jan-Mar 2009||Jan-Mar 2008||Yr % Change|
|Avg $ SQFT||$0.72||$0.71||$0.72||-2.01%|
|Not Rented %||30.03%||25.12%||23.02%||9.12%|
As noted in the chart above, average rents in Austin (for single family homes) are $1,364/mo., down 1.45% from $1,384/mo. the same quarter 2008. Median price has fallen from $1,225 a year ago to $1,200 this year, meaning half of all homes in Austin rented for $1200 or less.
Below is a graphical representation of the Austin rental market from 1999 through March 2009.
An interesting news announcement came to me the other day. The title was “Trulia Introduces ‘Hair Cut’ Search Engine”. This is a new feature that allows someone searching for real estate listings on Trulia to weed out listings that haven’t had a price reduction, and thus view only listing that have had a price reduction.
Trulia CEO Pete Flint says:
“It doesn’t matter if your price point is $200,000 or $2 million, in these difficult times people are searching for the best deals they can find on homes. Our new price-reduction functionality makes it easier for people to find the home of their dreams without laboring through unwanted results.”
Oh brother. What a bunch of hogwash. This does not in any way make it easier to identify better deals. And why would a listing that hasn’t had a price reduction be an “unwanted result?” This gimmick joins the list of stupid and useless features and functionality pushed out to unwitting online consumers who gladly eat it up because they don’t know any better. It does give Trulia a reason to push a news release, but their programmers could have been better utilized doing something less worthless than this. Such is the world we live in today.
News flash for Trulia: the best priced listings are already marked “Pending”, and most went Pending before a price reduction occurred. OK? This is an ascertainable fact, not a marketing gimmick to boost web traffic.
For example, of the 75 listings currently pending in SW Austin, 10 had price reductions. That’s 13% of the listings that have already been deemed the best out there by real buyers writing real offers. Of the 173 listings still on the market in SW Austin (MLS Area SWW), 39 have had price reductions, which is 23% of the available listings. Which homes are a better buy? The ones that are Pending, or the 23% of homes still available that have had a price drop? And why would someone only want to know about 23% of the available listings in an area when searching for a home? Only a really stupid buyer would restrict his search in such a manner, Mr. Flint.
So, what factors do help us determine which listings are a good buy?
Read more …
Sylvia and I have turned down some listings recently. We only take listings we think we can sell. The result is, in a market where half of all listings end up Expired or Withdrawn, we just had our first Withdrawn listing in a couple of years last month. And that was because the owner rented the house before we were able to find a buyer. We’ve not lost any listings to Expired status.
To some agents, we are fools. Don’t we know that every listing should generate two new buyers from the sign calls, and therefore even a listing that doesn’t sell is still a listing worth taking? Yes, we know that logic. We know about the 800-number rider signs that would text the Caller ID to us so we can call the buyer back in 3 minutes and try to convert them to an appointment.
We just don’t work that way, nor do we agree with the premise upon which that business strategy is based.
So, there are two basic camps of thought on the issue. One says that listings are supposed to be sold, and if an agent doesn’t think the listing will sell, then don’t take it.
The other point of view is strictly business and numbers. Listings, if marketed properly, generate buyer calls which can be converted to buyer clients who will buy other houses. Who cares if the listing doesn’t sell? Two other sales (on average – if you work it right) will result from having the listing, and that’s good business, right?
Wrong. I disagree with the second line of reasoning, and here’s why.
Read more …
The average and median sold prices in Austin are down for March 2009, which extends a streak of 7 months in a row during which average home sales prices in Austin have been up, then down, then up, from the month before. The market does seem to be establishing a slight down trend, because the bottoms keep inching lower each time, but is still bouncing up and down so much that it’s hard to know for sure where things are headed.
What’s interesting is that the swings have been so wild the past 4 months in particular, bouncing from the $230K to the $250s and back again. I’ve started keeping a chart to graph the movement.
For March, average sold price is down 3.82% from Mar a year ago and median sold price is down 3.54% from last year. Volume of sales dropped 27% for Mar compared to Mar 2008. The number of “Not Solds” (expired or withdrawn) is at 44% for March, meaning 44% of the listings that departed the MLS in March were failed sales efforts. Let’s look at the breakdown of the rest of the Austin single family home sales for Mar 2009:
• Number of homes sold is down 27% (was down 25% last month) from 1,782 Mar 2008 to 1301 Mar 2009. Note the Feb 2009 had fewer than 1,000 sold homes.
• Average list prices in Austin were down 3% over the same month last year to $247,014.
• Average sold prices in Austin were down 3.82% over the same month last year to $234,869 from $244,807 a year ago.
• Median sold price was down 3.54% to $184,000. Last year in March it was $190,745.
• Average List to Sold price ratio is 95.08%, down slightly from 95.94% the same month last year. Note that this reports the sold price compared to the last list price, not the original list price. I have run that stat lately but it’s probably in the low 90% range.
• Avg sold price per square foot is down 5.38% to $108 compared to $114 a year ago in Mar.
• Avg days on market is up 14 days (20%) from 70 last year to 84 this March.
• Median days on market is up 14 days (31%) from 45 days last year to 59 Mar this year.
• Number of “Not Sold” (exp or withdrawn) is up 20% over the same month last year, to 44% of all removed listings compared to 37% for the same month last year.
The chart below show the figures for March 2009 compared to March 2008 and Feb 2009.
Read more …
I’ll be attending the Angelou Economics Austin Economic Forecast today, hosted by the Oak Hill Business and Professional Association. This is a rerun of the presentation presented earlier in the year (but which costs $270 to attend). The power points and information are posted up on the Angelou website, but I always appreciate the question and answer dialog that occurs at the live presentation.
Most interesting for me, and I think others who attend each year, is the perspective gained on how well Austin really is doing relative to just about anywhere else in the country. Yes, our real estate market has slowed down, though mostly in the upper price ranges. Yes, unemployment has risen, though still lower than Texas or the Nation. Yes, there have been layoffs, though job growth remains slightly positive and will improve again in 2010. But compared to any place else in the U.S., Austin is chugging along very well. Check the links below for the data.
Read more …