Below is a chart breaking down the 2010/2009 sales comparisons by MLS Area for the Austin real estate market. This time I’m adding a couple of new things. First, there is color coding on each of the summary rows for each area. A green shade indicates “improvement” in the measured metric. I put “improved” in quotes because it’s debatable what that means, and for whom, so perhaps a better word to use would simply be “increase” toward seller’s market. Note that a decrease in Days on Market is an “improvement”, however, as it means homes are selling faster, so a negative number on DOM is coded green and vice-versa, whereas the other negative numbers are red. Confusing enough? I hope not.
Next, I added a new column called SP/OLP which is the Sold Price divided by the Original List Price. I think this is a useful metric to observe as it informs us of the gap between the original list price a seller was hoping to obtain and the ultimate sold price achieved. This is more useful to know than the more commonly reported metric of SP/LP (Sold Price/List Price) because it doesn’t disguise the price drops that occurred before the home eventually sold.
In other words, a home that started at a list price of $300K, was eventually dropped to $270K, and then sold for the $270K list price, would produce a SP/LP ratio of 100%, but a SP/OLP of 90%. The 90% is a more accurate measure of market strength or weakness in a given area. You’ll see below that some areas are right at 95% (which is pretty good) and some are below 90%, which is a tougher market requiring bigger price drops.
OK then, let’s take a quick look at the new format using the cumulative sold data for all of 2010 compared to 2009.
|All MLS||# Sold||Avg Sold||Med Sold||Avg SQFT||Avg PSF||Avg Days||Med Days||SP/OLP|
So, with the color coding, this allows a “quick glance” gleaning of which areas saw increases/decrease in the measered metrics across the board. We can see above, looking at the entire Austin MLS market as a whole, that the average sold price increased 3.78%, median sold also increased, by 2.63%, Sold Price Per Square Foot increase 2.04%, and homes sold faster when looking at Avg Days on Market. But we also see that 5% fewer homes sold (lower demand) and that the median DOM and the SP/OLP ratios worsened. This “mixed” market is in fact what most areas produce.
One last aside, if an MLS Area is mostly red all the way across, such as Area 10S, does that mean buyers should avoid that area? Absolutely not. This is a look in the rear view mirror and doesn’t necessarily predict the future or indicate a trend. Same with areas that did well in 2010. This is just a snap shop of what happened in the given year 2010 compared to the year prior. If you own a home in an area that had a dog year, your particular neighborhood or size/price of home may have perfromed differently, and that won’t be reflected in this type of macro analysis of area-wide stats.
OK, the entire Austin MLS is broken down by MLS Area in the chart below. As usual, questions, comments, observations are welcome.
The Austin real estate market finished 2010 with increased overall sales prices. The market is roughly a bit higher than the peak 2007 values. See the graph below for an illustration of Austin home sales values from 1999 through 2010.
The graph can be deceiving though. It simply represents the cumulative data from all MLS sales. Certainly, most homes in Austin are at or still below the 2007 values. Some are significantly below the 2007 values, especially in the high end at $500K and above. For the entire year of 2010, 48% of all MLS listings departed the MLS as a failed sales effort (expired or withdrawn). Anytime half the listings are not finding buyers, it’s a tough market for sellers overall.
On the flip side, 2010 was not exactly a “buyer’s market” in Austin. There was little to no “low hanging fruit” to be plucked from the market. Sellers were, for the most part, not crying Uncle and were not dropping prices drastically. Yes, we have anecdotal examples of some good deals that were had by some buyers, but most buyers were simply frustrated at the difference between the perceived “buyer’s market” and the actual reality of trying to find a great home at a great price.
The only winners in 2010 were the sellers who were fortunate enough to sell quickly at an acceptable price, and the buyers who allowed for themselves enough flexibility and patience to eventually find the right combination of motivated seller and acceptable home. It was not a good year for picky buyers with narrow parameters, as they kept running into stubborn sellers unwilling to negotiate to the degree buyers thought warranted by market conditions.
Year 2011 will be more of the same in the Austin real estate market, but volume will pick up and I believe sellers will start enjoying a slightly better market. 2012 is the year that things will really bust loose again, in my opinion, but we’ll see. 2011 may have a surprise upswing in store if job growth continues to pick up in Austin. More market stats below.
Take a look at this chart showing the number of homes that go under contract, or “Pending”, in Austin each month over the past several years. The green line is 2010. I could almost stop writing at this point and just let the chart tell the entire story. But have a careful look at the Austin real estate market behavior for the past several years, and then see what our government caused to happen in April and May with the $8K tax credit.
The writing was on the wall last month when I wrote about the Tax Credit Effect on the Austin Real Estate Market. We had a record number of homes go Pending in April, and May was looking pretty slow, and that didn’t change. So we end up with a record high followed by a record low month in terms of number of homes going under contract.
And in June, the hangover persists. As we head into the last weekend of what is historically the second busiest month of the year, the Austin real estate market is getting ready to lay another rotten egg. Thanks Tax Credit, for sucking the life out of the market, even with interest rates yesterday at 50 YEAR LOWS!. At present, we have about 1250 homes that have gone Pending in June, so even if we have a brisk next 6 days, you can look at the chart and see that June will remain substantially below the expected level under normal conditions.
What does this look like out in the field?
The $8,000 buyer tax credit ended April 30, 2010. Take a look at the following graph to see the effect the tax credit had on buyer activity in Austin TX. This shows Pending activity for Austin MLS listings going back to Jan 2005 through April 2010. The green line is 2010. The previous years of 2007, 2008, 2009 are represented by the other colored lines.
I used Pending listings because a lot of the April Pending sales haven’t closed yet, but anything that qualified for the tax credit would have to be Pending by April 30th, so this gives us a sneak peek at what the sales data will look like for May closed sales.
A couple of interesting things to note here. I went back to 2007 because that was the peak year for Austin. As you can see on the chart, April Pending listings exceeded the peak year of 2007 for April. I suspect we’ve never experienced an April in Austin where almost 3,000 homes received accepted offers.What does this mean for the future?
The Austin real estate market ended 2009 on an up note, with both average and median sold prices up more than 5% over Dec 2008. Oh, but wait … December 2008 was a dismal month because we all still thought the financial world was falling off a cliff. But the stats are what they are so let’s have a look.
Number of homes sold is down 4.39% from a year ago, which is a small decrease compared to the numbers we were seeing earlier this year. Average list price is up 3.71% to $276,387, Median List Price is up 5.22% to $199,900, Average sold price is up 5.15%, Median sold is up 5.39%, the Sold/List % is up 1.39% to 95.54%. And Average Price per Square Foot of sold homes is also up, by 1.11%, to $115.36.
Average Days on Market was up about 4% to 82 days, but Median Days on Market was down 14% to 48 days. The number of Not Sold was down also, though at 56% still a big number, but that’s normal for December when lots of sellers give up for the holidays.
Here is the chart showing Nov/Dec 2009 and Dec 2008 sales stats.
|Austin Real Estate Sales Market Update December 2009 Sales|
|Homes only (condos, duplexes, etc. not included) compiled from Austin MLS data|
|Nov 2009||Dec 2009||Dec 2008||Yr % Change|
|Avg $ SQFT||$114.69||$115.36||$114.10||1.11%|
|Not Sold %||46.30%||56.02%||57.39%||-2.37%|
So, that’s a bunch of numbers, but what does it all mean? Is the Austin real estate market rebounding from the slight decline of 2009? I think it is. 2010 will be better than 2009 for sellers. Buyers will still find plenty of good opportunities though.
October saw a huge 31% increase in the number of sales in Austin over the same month last year. Remember though, Oct 2008 took a 28% dip from the year prior, so while this October did see a good increase in sales volume, due in part to the $8,000 tax credit program, we’re comparing a dreadful month one year prior to a turbo-charged market this year, thus the big swing. Nonetheless, brisk sales for October was not an unwelcome result.
Let’s take a quick look at the monthly home sales prices in Austin for the past 20 months.
You can see that May 08 and May 09 were both the peak sales prices in their respective years and that sales prices drop in the off seasons. This year is no different but our sales volume has picked up more than usual.
Let’s see in the graph below how October 09 compares in all the metrics to October 2008.