The Austin real estate market did about what we expected in 2011, which wasn’t much. Basically treading water with some slight improvements, but nothing that represents a notable shift in market activity. Instead, it looks like momentum is building for a breakout year of increased activity and rising prices either in 2012 or 2013.
Let’s start with a look back at the past 12 years for some context.
From 1999 to 2001, you see the effects of the Tech Bubble, as Austin experienced strong job growth, which in turn drives housing demand. From 2002 through 2004 (and most of 2005, though not obvious from the graph), Austin housing prices were flat, as we suffered the hangover of lost jobs after the Tech Bubble bust. Then in 2005 jobs returned as well as a lot of real estate investors who felt that other areas such as Phoenix, Las Vegas, Boise, Florida, etc. (which we now know were in a severe bubble) were playing out. So we had a mini burst of strong buyer demand through about the middle of 2007. After dipping in 2008, prices have slowly climbed since then, though many homes still sell for 2007 prices. By 2010, overall values were back to 2007 prices and have now surpasses the 2007 high. That’s the Austin real estate market in a nutshell, for the past 12 years.
Let’s look at the gains in 2011 compared to 2010.
|Austin Sales Market Update – Dec 2012 End of Year|
|Homes only (no condos, duplexes, etc) – Data from Austin MLS|
|Jan-Dec 11||Jan-Dec 10||Yr % Change|
|Avg $ SQFT||$116.11||$115.19||0.80%|
|Not Sold %||40%||48%||-16.61%|
The number of homes sold increased by 6.67% in 2011 compared to 2010. That’s a fairly solid increase. At the same time, the number of “failed sales” (expired and withdrawn) listings fell from 48% in 2010 to 40% in 2011, meaning more sellers were successful in eventually selling their homes. In 2010 almost half of all MLS listings failed to sell. For 2011 it dropped to 40%. Days on market increased, which ties into the lower failure rate as sellers allowed their listings more time to sell instead of giving up. All the other stats, as you can see above, showed only slight movements. Prices are up 1.6%, not enough to get excited about, but moving in the right direction if you’re a “waiting” seller.
I’ll be working on a breakdown area by area later this month to see if there are notable trends in “hot” or “not hot” areas. I suspect there are, but not to the degree that one might imagine. As usual, comments and questions are welcome.