Austin Housing Market Update – Midyear 2011
Homes values in Austin are trending up overall. This graph shown below can be deceptive though, because market activity is highly localized within pockets and neighborhoods. Let’s have a look and I’ll discuss further below.
It’s impoortant to understand what a graph like this is and what it isn’t. It’s not an indicator of the value of your specific home. Many homes in Austin still won’t sell for the price they sold for in 2007. Many will sell for more now. It’s very dependent on activity and demand in your local area.
We recently listed a home in Avery Ranch at a farily agressive price and had multiple offers right out of the gate. That actually surprised me. Many other homes in Avery Ranch are just sitting though. We put our listing through a lot of prep and staging in preparation for the market, and the market responded. I see a lot of listings that may look similar on paper, but when you walk in, they fall flat on preparation and staging, often with dumb things left undone such as minor touchup paint and yard cleanup.
Meanwhile, one of our Central Austin listings which is priced well (a 3/2 under $250K) in a great location off S. 1st in the 78704 zipcode isn’t receiving the level of activity we’d expect at that price point in that location. It’s staged and well prepared as well (though it did have tenants occupying it at first). But we’re still waiting for the right buyer. This is frustrating. I know this house is a good deal but can’t explain why the market isn’t responding.
So, “prices in Austin are up” doesn’t apply to every home.
Nevertheless, the chart is meant to show the overall macro trend as indicated by the data in the entire Austin MLS for all homes sold. From that viewpoint, the Austin real estate market has surpassed the former peak of 2007 and looks to be experiencing increased values overall. Eventually, a rising tide floats all boats and that’s where I think we’re heading. I think Austin is on the leading edge of what may be a steady 4 to 7 year up cycle. Not a boom per se, but steady and reasonable value appreciation of 3% to 5% annually.
One of the indicators of this can be found in the new home market. Many builders are slowly increasing prices on floorplans. It’s very tentative, but, for example, in one neighborhood in which we sold a buyer a home in Lakeway, the on-site agent says they’ve already sold more homes this year than in the previous two combined. And they just raised prices again and they are entering into the last third of available lots. There will be a shortage of “Grade A” lots soon, so builder are going to be hesitant to run out of inventory and will instead slow that by increasing prices. This will in turn affect resale values.
Let’s have a look at the month-by-month Austin home sales for the past 40 months.
The Market spiked in July last year because all of the lower priced sales close by June 30 (remember the $8,000 tax credit that caused a lot of buyers to pay $10K over value to get the $8K credit?), so July 10 saw a disproportionate number of higher price listings sold. Remember, this is the first summer in 4 years where we don’t have some sort of government meddling and interference in the market. So out look-back stats are still looking back at distorted data and the resulting market hangover that persisted through the remainder of 2010.
Not show in these charts is the decrease in the “Not Solds” (the number of Expired/Withdrawn listings versus sold listings each month) which, for June, dipped to about 32%. More on those stats in a later post.
On a side note, I’ve been in a blogging slump. I just haven’t felt like writing, but I’m trying to get my Mojo back. After 5 years of cranking out blog articles about Austin real estate and other various stuff, I sort of hit a wall this year. They use to just drip off my fingers without much effort, but it’s become difficult for me to sit down and start writing. I think June 2011 was the first month ever where I didn’t write anything at all. My plan is to try to start writing shorter articles and more of them, and see if I can get back in the groove. We’ll see how it goes.