It’s getting real hard to write about the Austin real estate market when month after month it just keeps doing what is expected, treading water overall, doing well under $200K, especially close in, and still soft in the $400K+ price ranges. That really sums it up, month after month. At the beginning of the year I predicted Austin would be down 3% to 5% overall this year, and we’re still on track for that.
For July, the average sold price compared to July 2008 is down about 4%, a bit more than the 3% average we’ve been seeing each month, but not a surprise. Median sold price is down 1.5%. Average price per square foot is down 5% from a year ago. Days on market is up to 71 average and 44 median, which are not bad numbers, but still worse than a year ago, which was worse than the year before. See the chart below for the previous month and pevious year comparisons for July.
|Austin Real Estate Sales Market Update July 2009|
|Homes only (condos, duplexes, etc. not included) compiled from Austin MLS data|
|Jun 2009||Jul 2009||Jul 2008||Yr % Change|
|Avg $ SQFT||$114.39||$114.06||$120.42||-5.28%|
|Not Sold %||34.53%||40.02%||41.28%||-3.06%|
The year-to-date chart is below. For the year Austin Average Sold price for houses is down 2.96%, median is down is dead even at 0% change, and average price per square foot is down about 5%. Our “not sold” are holding at 42%. See below for the details
|Austin Sales Market YTD Update – July 2009|
|Houses only (no condos, duplexes, etc) – Data from Austin MLS|
|Jan-Jul 09||Jan-Jul 08||Yr % Change|
|Avg $ SQFT||$112.27||$118.45||-5.22%|
|Not Sold %||42%||39%||8.75%|
The next graph shows what the Austin real estate market looks like over the past 17 months.I like this graph because it’s easy to see that despite some ups and downs month to month, there seems to be no general trend toward the dire predictions that some feared for Austin. Matter of fact, if the last 17 months represents Austin’s “bubble burst”, then the stats show that we had no bubble to begin with, which is what I believe.
Below is the Austin market from 1999 through July 2009 Year-to-Date.
About the chart above, remember that the 2009 numbers are year to date while the other years are complete year stats. Thus, 2009 does not yet suffer or get dragged down by what is normally a slowdown in the fall and winter. However, I think this year we are going to see a spike in October and November sales as buyers rush to beat the Nov 30th closing deadline to receive the $8,000 government giveaway for buyers who haven’t owned a home in the past three years. That combined with the fact that a year ago in September it looked like the world financial system was on the brink of collapse and the market took a nosedive, I think the trend we’re seeing above will continue and perhaps even improve.
Sidebar: The incompetence and inability to close on time by most Mortgage Lenders is going to become prime time news headlines near the end of November if a 1 day delay from Nov 30th to Dec 1st will cost buyers that $8,000 tax rebate. I doubt government officials are foreseeing or preparing for this, but it’s going to get ugly when deals start cratering and lenders and underwriters are held accountable for their lax attitudes toward meeting closing deadlines. Stay tuned for that carnage! My advice, write your deal to close at least a week before Nov 30th so you have some flex room.
Back to the stats. Below is the price range breakdown for July sales. This is a topic that I think is really interesting, and Sylvia and I have some first hand anecdotal experience to share about how different market segments are behaving. First, let’s look at the chart.
|Austin House Sales and Inventory Report July 2009 by Price Range|
|Price Range||Number Sold||Avg Days on Mkt||Active Aug 2009||Months inventory|
|$149,999 or under||512||61||1602||3.31|
|$150,000 – $199,999||496||63||1738||3.71|
|$200,000 – $249,999||270||64||1183||4.27|
|$250,000 – $299,999||221||84||1015||4.83|
|$300,000 – $349,999||121||75||692||6.05|
|$350,000 – $399,999||103||91||625||6.74|
|$400,000 – $449,999||56||82||443||8.01|
|$450,000 – $499,999||31||81||416||10.58|
|$500,000 – $549,999||29||74||241||8.03|
|$550,000 – $599,999||25||92||263||14.61|
|$600,000 – $699,999||37||109||341||9.93|
|$700,000 – $799,999||15||78||223||15.56|
|$800,000 – $899,999||10||108||182||17.61|
|$900,000 – $999,999||5||67||132||22.00|
|$1,000,000 or over||19||169||625||29.30|
The sales market under $200K has turned into a undeniable seller’s market. In fact, the month’s inventory has moved down in the price ranges that were previously buyer markets. $300K to $400K is tightening up to a balanced market. (6 months inventory represents the balance point between buyer/seller markets)
What does a seller’s market under $200K look like? Sylvia and I listed a house in South Austin last Friday and had two offers in less than 24 hours. It went under contract for over the list price. We expected strong demand, but it’s an older 1970’s home in Cherry Creek and it needs some work, so we priced it accordingly. It had 5 showings the first afternoon on the market.
When I ran a Active/Pending ratio analysis for South Austin, 78745 zip code, houses at least 3/2/2 under $200K, the results explained the high demand. There are at present 25 Active homes matching that search and there are 34 Pendings. That’s an inverted demand ratio. Normally, in a hot market, we’ll have 1 Pending for every 2 or 3 Active listings. In 2006/2007 we were often seeing Active/Pendings running about equal. But even in 2006/2007 when California investors were running our market up, I rarely saw a ratio such as 25/34, and never across and entire zip code. It would normally be limited to narrow searches in South and SW Austin in specific subdivisions, such as 8 Active and 11 Pending in Legend Oaks or a section of Circle C.
So, bottom line, South Austin is HOT, Super HOT, under $200K. This must be the early surge of the tax break buyers, getting out there and looking for something affordable and close in. I know it sounds like Realtor Hype, but anyone ready and able to buy who isn’t getting out there right now is a dummy. Waiting is stupid. I don’t know how more plainly I can state it. Houses in that first time buyer range that are well located, such as South Austin, are not going to get cheaper and interest rates are not going to go lower. It’s just amazing to me that people thought a year ago they could wait for 10% price drop on houses like this. That was never going to happen.
OK, off my soap box. As usually, questions, comments and observations are welcome.