One of my favorite pastimes while driving in Austin is listening to Bloomberg News on my XM Radio. More specifically, I enjoy hearing interviews and discussions with people who explain and justify the positions they take on a wide range of (mostly) business topics. This includes small business, the economy, politics, real estate, etc., but also more specific micro topics such as the current and future outlook for farm tractor sales. And, thankfully, Bloomberg Radio is free of the bluster, yelling and arguing heard on the other XM Radio news stations. These are, for the most part, reasoned subject matter experts giving their honest take on things.
Call me nerdy, wonky, or whatever, but I really dig listening to this sort of stuff. When not listening to it, I’m reading about it. I believe it helps me better understand my own life and business. And it helps fulfill one of my ongoing goals, which is to never stop learning.
Recently, a dating expert was being interviewed about the business of match making sites and the state of modern “mate seeking”. She also discussed the mistakes she sees made by most aspiring romantics. Turns out there are a lot of frustrated romantics unable to find what they want in a mate. This despite the fact that finding and “connecting” with good, quality candidate dates has never been easier. I was struck by how similar her points were to the typical “match seeking” efforts of real estate buyers looking for the “perfect” home.
The quote that stuck with me most was related to how many daters reject someone who actually possesses more than 85% of what the seeker says she “must have” in a mate. To that point, she said. “Do you know how hard it is to get to 85%? If you find someone who meets 85% of your most important criteria, you should be running, not walking, to the alter with that person”. That’s what she said. Run, don’t walk to the alter.
Daters, apparently, allow too many small, picky “deal breaker” distractions into the evaluation process. “I don’t want to date a guy with thin hair” or “I can’t see myself with a guy who would wear a checkered shirt”. But if the guy loves horses, wants kids, and appreciates and “gets” her sarcastic irreverent humor, he’s going to make the great husband she says she wants because he meets the most important set of criteria. Even if he’s only average looking and a little too short.
Dating is more complicated than house hunting because the three (and only three) most important criteria a mate seeker should be evaluating will differ from person to person. House hunters, on the other hand, have had the same three static criteria forever – Location, Price and Condition (which includes age/size). It’s really not complicated at all. But modern buyers have made it so, by allowing too much information and data into the equation.
So, why do so many Austin buyers reject homes that are priced right, in the desired location, and of acceptable condition/size? Are Austin real estate buyers too picky? Yes. And many are just as frustrated as the single 34-year-old gals that dating expert was talking about.
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.
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?
Below are the Austin housing market stats for October 2011 and year to date.
|Austin Sales Market Update – October 2011|
|Homes only (condos, duplexes, etc. not included) compiled from Austin MLS data|
|Sep 2011||Oct 2011||Oct 2010||Yr % Change|
|Avg $ SQFT||$113.57||$115.78||$116.04||-0.23%|
|Not Sold %||44.39%||45.79%||58.29%||-21.45%|
As shown above, average and median sold prices are down 2.3% and 3.6% for Oct 2011 compared to Oct 2010. The number of homes sold increased and the number of failed sales efforts (Withdrawn or Expired) decreased. The sold to list price ratio increased a bit and the Days on Market improved.
Nothing really suprising or new here. The Austin real etstae market is still moving along somewhat, treading water for the most part. See the Year to Date and 44 month graphs below.
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”.
Read more …