Austin Real Estate Market Update and Stats – Jan 2009


Average sales values for single family homes in Austin fell 5.43% for January 2009 compared to Jan 2008. Median values fell as well, by 4.80%. Number of sales fell 40% and the number of Not Solds (expired/withdrawn) for Jan was 61% of all listings that departed the MLS. And yet, despite this, finding a “smokin’ hot deal” in Austin just ain’t that easy. Sellers are hanging tight for the most part, and simply pulkling listings from the market if they can’t get their price. Combine that with buyer reticence and we have what I’d call a “stalled” market.

It’s definately a Buyer’s market, but only for buyers willing to work hard. And sellers can sell, but many sales attempts will fail. 

Austin Real Estate Sales Market Update for January 2009
Homes only (condos, duplexes, etc. not included) compiled from Austin MLS data

Dec 2008 Jan 2009 Jan 2008 Yr % Change
# Sold 1236 770 1280 -39.84%
Avg List $265,180 $249,790 $261,155 -4.35%
Med List $189,900 $189,900 $198,250 -4.21%
Avg Sold $249,718 $235,623 $249,164 -5.43%
Med Sold $184,000 $180,875 $190,000 -4.80%
Sold/List % 94.17% 94.33% 95.41% -1.13%
Avg SQFT 2202 2168 2160 0.37%
Med SQFT 1981 1942 1956 -0.72%
Avg $ SQFT $113.41 $108.68 $115.35 -5.78%
Avg DOM 79 82 73 12.33%
Median DOM 56 66 56 17.86%
# Expired 849 532 577 -7.80%
# Withdrawn 836 688 621 10.79%
Not Sold 1685 1220 1198 1.84%
Not Sold % 57.69% 61.31% 48.35% 26.81%


One thing to note on the Not Solds data, though not shown in the chart above, is that I ran the stats for homes that listed for $200K and less, and the not solds were at 54% instead of 61%. For properties listed for more than $200K, the not solds were 68% of all listings, meaning 68% of all listings that departed the MLS in January we failed sales attempts. That’s simply a super high ratio, and something serious sellers would be dumb to ignore when deciding on preperation and pricing strategy.

Let’s look now at the breakout of what is selling by price range, and current months inventory. This will show number of sold for the different price ranges, Days on Market (DOM), number of currently active listings, and the number of months it would take to absorb the current inventory based on the trailing 3 month sales rate.


Price Range # Sold DOM Active Months Supply
$149,999 or under 266 61 1596 5.08
$150,000 – $199,999 173 77 1404 5.80
$200,000 – $249,999 104 98 1059 8.02
$250,000 – $299,999 60 101 913 10.41
$300,000 – $349,999 61 90 573 9.34
$350,000 – $399,999 32 90 577 14.55
$400,000 – $449,999 23 112 334 11.52
$450,000 – $499,999 8 81 338 21.57
$500,000 – $549,999 8 128 193 16.08
$550,000 – $599,999 8 145 227 21.97
$600,000 – $699,999 10 128 295 24.58
$700,000 – $799,999 6 134 204 25.50
$800,000 – $899,999 2 83 151 28.31
$900,000 – $999,999 1 0 98 49.00
$1,000,000 or over 8 183 458 40.41


The far column to the right show months of inventory. In a normal, balanced market, one in which neither the seller or buyer has a market advantage, inventory would be around 6 months. That’s the generally accepted number in the industry. Inventory greater than 6 months is a buyer’s market, as buyers have a lot of inventory to pick from.  Less than 6 months is a seller’s market, meaning sellers have plenty of buyers competing for the existing homes for sale. 

The $200,000 and below price range in Austin is doing ok for the most part, though the “Not Solds” for this segment are still about 53%.  So, with 5.8 months of inventory, it would seem to be a balanced market below $200K. Mainly it’s the higher range stuff that’s really hurting as you can see by the inventory levels. Lower priced properties in outskirt areas are suffering also due to location, which I think skews the not sold ratio a bit. But homes in the $200K range that are well located, priced right and in good shape are experiencing a much different real estate market than the higher priced homes. 

Finally, a picture is worth a thousand words. Below is a graph of the average and median sales prices in Austin from 1999 through Jan 2009. Note that the dip in the Jan 2009 may be somewhat misleading since Jan is typically a slower, lower sales value time of year. However, since Jan was in fact down 5%, and since I think 2009 might be down 3% to 5% for the entire year, this is what the chart would look liak at the end of 2009 if I’m right.


Austin Single Family Home Sales
Austin Single Family Home Sales


As usual, comments and questions are welcome.

19 thoughts on “Austin Real Estate Market Update and Stats – Jan 2009”

  1. Steve,

    I was hoping you could provide some insight to a notion I have seen tossed around frequently, “Homes will sell if they are priced right.”

    I see the logic behind the statement, that a home will sell in almost any market if it is priced appropriately. The problem, and what I do not quite get, is that it seems to be circular logic. A home will sell if it is priced right, but the only way to know if a home is priced right is if it sells.

    In a volatile, downward market, such as we seem to have now, CMAs become less useful, so they can not resolve my dilemma. From a buyer’s standpoint, if the market is stalling, as you suggest, then that indicates that the market (on average) is not priced appropriately and should go down more. How much is needs to go down becomes the big question.

    Since it is hard for a buyer to know whether an individual house is priced right in an overall market that is not priced right, why (and how) should they avoid the safe assumption that this house follows the general rules of the market?

  2. Hi Aaron,

    > A home will sell if it is priced right, but the only way to know if a home is priced right is if it sells.

    There are a lot of ways to price a home correctly even in a downward moving market, including adjusted CMA, absorption rate, Active/Pending ratios, showing activity and feedback obtained from other agents, and looking at the immediate competition.

    It is in fact a lot more difficult to peg the price though, and many sellers and agents, us included, sometimes find ourselves “chasing the market” in a down shift.

    What happens in a soft market is simply that fewer homes sell. But homes do sell.
    If you’ve never read the Tale of Two Markets, check it out here:

  3. Hi Shilli,
    I break down area stats each quarter. Check the December update for 2007/2008 stats by MLS area.

    But your assumption is correct. The closer in area did not have falling values last year. Neither some of the further areas with better schools.


  4. Thanks Steve for your great work. We really like it.

    I just have one question.
    Your number for houses sold in Jan/2009 is 770. ABoR published that the Single Family Homes sold was 834 for the same month.
    I am sure both numbers are correct. I just want to know what is the search criteria for each one.

  5. From the Four Seasons project developers:

    “Figures for the condominium market in downtown Austin are very encouraging. Of the 800 units delivered in 2008, over 90% have already closed. Furthermore, several planned projects have been put on indefinite hold due to a lack of financing which will reduce the amount of future supply for years to come.”

  6. Steve-
    I am so lost. We are thinking of buying this summer, in the $200-$300K range (depending on how cheap we can get a 3 bed 2 bath with decent yard). We may very well have to move in three years though, so is this just a bad idea for us? Will we not be able to recoup our down payment/closing costs/etc. in that time? In a “normal” market the research I did showed we would break even, which is fine, because the intrinsic value of having a yard rather than renting an apartment is huge for us…but in this market I am terrified we will take a big loss! I am assuming buying in close-in Austin is a better bet than somewhere like Georgetown, or Round Rock, but is it enough to insulate us from losing a ton of money? Thanks!!

  7. Hi Lara,

    Normally, a three year time horizon is about the cutoff between rent vs. buy. In this uncertain economic environment, I’d probably wait unless you know you’ll hold the property at least 5 years. The exception would if you can find a purchase substantially below market or if you’d be in a position to keep the property as an investment after you move in three years.


  8. What’s with the really ugly houses being built on (and just off of) Balcones Drive? Examples are at the absurdity at the corner of Shinoak Drive and Balcones Drive and the new eyesore on Barranca Circle.

  9. Sitting on the sideline as an investor. Sold out of Florida in 2007 and bought in the Caribbean. You would think resort property would be protected, but not the case. Having family in Austin and graudates of UT, is now the time to buy a home in Austin as an investment? Looks like there’s more room to come down, but the inventory for the $900,000 to plus $1,000,000 is high. I live in Plano, TX. and still own a business in Dallas, so this would be an investment for a second home to hopefully sell in 3 to 4 years with a positive return. Hope I’m not coming across as greedy, but I’m at the baby boomer age and looking for a positive investment, plus we love Austin.

  10. Jerry,

    As I have been commenting, be patient. Steve’s stats shows that the real estate market has all but dried up. I think we can all agree that 40% drop in sales is a market that is frozen.

    Sellers are holding on because they still have jobs, but that’s about the change and employment picture is just starting to rollover. Wait for unemployment to really start kicking in and that will force them to capitulate and sell at much lower prices. Most people will exhaust their savings around 6 months after losing their jobs and you can either buy from them or the bank after foreclosure. The banks that own these homes aren’t in any position.

    There’s no reason to buy until the employment picture turns around…

  11. Thank’s for the input and your helpful advice Leon. Invest and buy to enjoy without the greed and dishonesty that’s been infused in some area’s of the country.

  12. Steve,

    Of the 770 homes that sold in January, is there any way you can tell us how many of those were foreclosures? I believe the national stats are something around 40% of homes being sold are due to foreclosures. What is the situation here in Austin?

  13. Leon,

    I don’t have a method of knowing exactly how many MLS sales are foreclosures or short sales, but it’s not a high number in Austin. I can search the agent comments for words/phrases, such as “foreclosure” and “short sale”. Doing that, only 42 of the 770 are matches, which is about 5%. The number is probably higher than that because not all will have that wording.


  14. We are looking to buy something downtown in the $3M range. Does anyone have any comments on what percentage I should be able to get the developer to drop on the price in today’s market.

  15. Greg,

    A “drop in price” is an irrelevant number. You need to determine what you think a downtown Austin condo is worth (get a downtown Realtor to help you – it’s a niche market – let me know if you need a referal), then decide what you’re willing to pay.

    The asking price isn’t even a number that factors into the offer equation, at all. Therefore, the amount of reduction from the asking price is really not a useful number to think about. It doesn’t mean anything. Instead, start with market value, and go from there.

    Good luck.



Leave a Comment