When you read a news article about Austin real estate that reports average and median home prices, the values quoted are often those from total Austin MLS sales. Those sales figures are compiled from the entire Austin MLS service area, including suburbs, nearby cities as well as some far flung areas. The “Austin MLS” might more accurately be referred to as a “Central Texas MLS”.
Therefore, you might read in one of the “Best of” articles about Austin, that “The Average Sold price for single family homes in the Austin Metro area for 2013 is $314,300 and the Median Sold price is $235,000”.
Those values are represented in the green bars in the graph above. To those thinking of moving to Austin, a median price of $235K sounds pretty affordable. It means half of all houses in “Austin” sell for less than $235K. A buyer with good credit earning the Austin median family income of $65K annually, can qualify for a mortgage payment of $1,950 per month at 5%, or a $266K home. Austin seems like a sweet deal and a great place to live to an outsider reading about it.
Below is the breakout of the Austin real estate market year to date, through June 2012 compared to the same period 2011. The format is as follows, which shows the entire market.
|MLS Area||Year||# Sold||Avg Sold||Med Sold||Avg SQFT||Avg PSF||Avg Days||Med Days|
The color coding at the bottom of each MLS Area summary indicates whether that measure improved or slid back. In the “All Areas” example above, all of the measures improved. That is, # Sold, Avg and Median sales prices, and Avg price per sqft all increased on a market-wide basis, while days on market decreased. Average sqft size is not color coded because I don’t see how a slight change in average size up or down is either good or bad.
A quick summary of some stats results:
Fastest selling: The fastest selling area in the Austin MLS market area is Southwest Austin (MLS Area SWW) which has an average days on market of 29, and a median of 10. Yes, half the homes in SW Austin have sold in 10 days or less so far in 2012. There are a lot of other MLS areas with median days below 20, which you’ll see in the full chart below, but no area is as hot as SW Austin in terms of demand. MLS area SWW includes subdivisions such as Circle C, Legend Oaks, and Villages at Western Oaks.
Highest Price Increases: There are 44 MLS areas shown in the chart below. 12 of those have avg price increases of over 10%. 12 areas (though not the same 12) have median sold price increases over 10% from last year. Most of the highest increases are in closer in areas of Austin proper, though Cedar Park/Leander North (CLN) and Georgetown West (GTW) are in that group, as well as dark horses Manor and Elgin, which have been perennial low performers in the market.
The full chart is below. As usual, questions and comments are welcome.
The Austin real estate market has found its traction this selling season. Good for sellers, frustrating for buyers. And there hasn’t been any let up. Sylvia and I personally had a record June. July has been extremely busy as well. We’re encountering multiple offers, backups offers, and several listings we’ve sold from “Coming Soon” signs that never made it into the Austin MLS.
That said, we still see that this good market isn’t yet showing up for every home or in every neighboirhood. So, for now, the rising tide is floating most boats, but not all. I’ll have a neighborhood breakdown in a following post.
I have several charts and graphs below that give visual representation to the market. The first is my recurring 1999 look-back graph. I like this one because it puts into context our market for the past 13 years.
Next is June 2012 compared to June 2011. The left column shows the previous month, for reference. The right colum is color coded, red for downward movement, green for upward movement in the particular market measure. As you can see, everything is green.
This isn’t a full-blown market update, but I wanted to post a few graphs real quick to show current market activity and movement. Let’s start with the graph below showing Average and Median Sold values for homes in Austin for the past 49 months.
So, what looked like a pretty bleak December/January (lowest of lows for past 49 months. See the previous bottoms) quickly turned into an upswing. This isn’t necessarily unusual. In fact, if you look back at every May in the chart, that’s when the price peaks normally occur, and we’re heading that direction again this year. What is unusual is the fast and sudden absorption rate of homes combined with shrinking inventory. This is a sudden “spike”, at minimum, and may develop into a sustained upswing. I’ve been monitoring this and don’t see any let-up yet.
Let’s look at the Active/Pending chart below.
Above, we see the aftermath of the Tech Bust in 2000/2001, and what happened to the Austin sales market in 2003. For 2003 there was an inverted Sold/Not Sold ratio. More listings failed to sell than actually sold. That’s a really weak, sour market when that happens. Dismal in fact. But then it happened again in 2010 in Austin. More sellers gave up (Expired or Withdrew) than successfully sold their homes in Austin. 2010 was the 4th year in a row of declining sales volume.
Then in 2011, we see these lines achieving separation again as the number of failed sales drops and the number of closed sales increases. And the separation is sudden and pronounced, indicating very strong buyer demand.
Now let’s see what that graph would look like for just the first 3 months of 2012.
Almost overnight, with little warning, the Austin real estate market has caught fire. We are encountering multiple offers and buyer frustration. Not everywhere, but in the popular neighborhoods. Let’s look at some Active/Pending stats for popular neighborhoods.
27 Active Listings. Average Days on Market = 35
31 Pendings. Average Days on Market = 32
Over half of all listings under contract. A normal ratio is about 1 of 5 listings under contract in a balanced market.
Southwest Austin 78749 Zipcode (includes Legend Oaks, Village at Western Oaks, Westcreek)
25 Active Listings. Average Days on Market = 88
49 Pendings. Average Days on Market = 38
Double the number of homes under contract than there are available. This is an ASTOUNDING ratio reflecting a lot of pent up demand.
South Austin 78704 Zipcode – MLS Area 7 – Zilker/Barton Hills
10 Active Listings. Average Days on Market = 126
16 Pendings. Average Days on Market = 50
Like SW Austin, the Active/Pending ratio is inverted, with more Pending listings than Active.
Northwest Austin 78759
60 Active Listings. Average Days on Market = 59
51 Pendings. Average Days on Market = 47
Nearly half of all listings under contract.
The ratio for the entire Austin MLS at present is 1 of 3 listings under contract, which is very strong overall, even in typically weaker areas like Manor and Hutto. What does this mean for the Austin real estate market?
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.