The Austin real estate market is chugging through the summer and producing some interesting stats. By that I mean that the stats shown below look better than some of the actual outcomes we are seeing in the market. Some homes are selling fast, at or close to list price, and others are not moving. In years past, I could find segments of the market or trends to point to. We still have some of those – some general rules of thumb – but we see a lot of activity, or lack thereof, with no rhyme or reason.
Lets start with the Year to Date chart through July 2010. You’ll note that almost every row shows improvement over the same period a year ago.
|Austin Sales Market YTD July 2010|
|Homes only (no condos, duplexes, etc) – Data from Austin MLS|
|Jan-Jul 10||Jan-Jul 09||Yr % Change|
|Avg $ SQFT||$115.63||$112.23||3.04%|
|Not Sold %||41.21%||42.12%||-2.17%|
Volume (number sold) is up 5%, Avg Sold price is up 3.5%, Median is up 1%, Days on market (DOM) is way down, and the number of Not Solds is down slightly. In other words, it’s all good news.
But for a lot of sellers, and buyers too, it doesn’t feel like “all good news”.
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We all know that some Austin MLS listings don’t sell. The reasons vary, but when demand is insufficient to absorb supply, the prettier better priced homes win, and the sellers who love their homes, and express that love and devotion through too-high list prices, get to continue the romance.
Let’s see what that looks like when put on a graph.
This is one of my favorite real estate statistical charts. The relationship between the number of successful sales efforts and the number failed sales efforts in any given market tells us a lot. This graph shows what happened to the relationship of success/failure of Austin’s MLS listings immediately following dot.com boom, 9/11 in 2001, and the subsequent bleeding out of jobs over the next few years. The real estate market became saturated with homes for sale as people had to leave Austin to find jobs, and new people stopped coming.
If you’ve seen the Austin real estate sales history graph that I post every month, you’ll know that home values stayed flat from 2002 through the end of 2005. Volume held steady during that period, but prices were flat while the rest of the country had its massive real estate bubble.
For Austin, there was no bubble. Instead, we suffered with too many homes for sale, not enough buyers, and thus in 2003 the number of listings that departed the Austin MLS as failed sales efforts (Expired or Withdrawn) actually exceeded the closed sales for the entire year. Austin sellers had it rough in 2003.
We’ve recently seen this inverted Sold/Not Sold ratio a lot during recent months throughout 2008 and 2009, but neither year ended with more total failed sales than successful sales. So, in that regard, these past couple of years haven’t been as bad as 2003.
Wanna know what happened to all those unsold homes in Austin between 2002 and 2005, back when foreclosing or short selling was still such a shameful event that sellers knuckled down and figured out how to hang on? A bunch of them became rental properties. This in turn caused a severe over-supply of Austin’s rental home market. Simultaneously, the in-migration that feeds the rental market stopped cold, and the chart below shows the result.