Austin Real Estate Market Update – December 2009
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.
Sylvia and I feel it. We’re busy. I just put a listing under contract before it even made it into MLS, off the sign calls. Buyer calls are increasing. Sylvia held an open house today and had over 10 groups come through a $577K listing, and most were actual, active lookers. The number of qualified investors has shrunk considerably due to (appropriate) lending restrictions being imposed that make it more difficult for financially incapable people to purchase rental property. Good. That’s how it should be.
Let’s have a look at the Austin Year End 2009 compared to 2008 full year comparison.
|Austin Sales Market YTD Update – December 2009|
|Homes only (no condos, duplexes, etc) – Data from Austin MLS|
|Jan-Dec 09||Jan-Dec 08||Yr % Change|
|Avg $ SQFT||$112.96||$117.36||-3.75%|
|Not Sold %||44%||45%||-3.30%|
The above represents the final report card on the Austin real estate market for 2009. I must say it’s about what we thought it would be at the beginning of the year. I figured we’d be down 3% on sold values and we ended up at -2.4%. Median values are down just 1%, and the volume sold is down just 6.5%. Homes are taking a bit longer to sell, overall, but the Expired/Withdrawn listings are even down a hair to 44% compared to 45% in 2008.
What will 2010 look like? I predict it will look similar to 2009, but up a bit, 1% to 3% in overall sold prices. Builders will slowly start getting braver and building more spec homes. The upper end market will continue to strengthen. Much will depend on our jobs market. We’re still at 6.9% unemployment in Austin, which is a lot better than the 10%+ national figure, but if we start seeing job growth in the second half of the year, I think we’ll build up momentum that will carry over into 2011 and make 2011 a year in which we might see 3% to 5%+ appreciation again, which is the historic average for Austin and for Texas.
The other wild card will be interest rates. Oddly, when they start rising, and they will in 2010, and buyers start really believing that the 5% train has left the station for good, they will start running to jump on board. Thusly, rising interest rates will at first cause an increase in buyer activity, hopefully this summer. 6% will become the new “good” rate but if interest rates climb above 6%, I think buyers will slow down again as they’ll need time to get use to 6 or 7 percent home loans becoming the norm again, and fretting that the Austin fallout in prices they were waiting for never happened.
Funny. I think anything under 8% is a good interest rate. I’m still paying that on two rental properties. Anyone under 30 years of age is an “interest rate crybaby” because they’ve grown up rarely seeing interest rates above 6% and think they deserve 5%. I’ve closed a number of buyers in 2009 with interest rates in the mid to upper 4% range. That’s really hard to believe. Sometimes buyers fret over not locking at 4.875% after it rises back to, brace yourself… 4.95%. God help us if interest rates go back above 7%. Some will equate that to $5/gallon gas, no doubt, and think the world has come to an end.
Next, let’s have a look at the price ranges of homes sold in Dec 2009 and the expected absorbtion rate of current inventory.
|Austin Home Sales and Inventory by Price Range – Dec 2009|
|Price Range||#Sold||DOM||Active||Mo. Inv|
|$149,999 or under||367||56||1788||3.97|
|$150,000 to $199,999||302||79||1602||4.05|
|$200,000 to $249,999||169||83||1024||4.83|
|$250,000 to $299,999||119||76||771||5.51|
|$300,000 to $349,999||84||86||526||6.00|
|$350,000 to $399,999||77||117||501||7.09|
|$400,000 to $449,999||37||143||303||7.84|
|$450,000 to $499,999||30||87||296||10.70|
|$500,000 to $549,999||24||128||162||7.36|
|$550,000 to $599,999||17||145||163||9.98|
|$600,000 to $699,999||17||95||229||16.36|
|$700,000 to $799,999||14||112||152||15.72|
|$800,000 to $899,999||8||156||122||14.64|
|$900,000 to $999,999||5||193||90||15.88|
|$1,000,000 or over||21||162||450||21.09|
Given that the median sold price in Austin for Dec 2009 was right at $200K, then half of all homes sold fell into the first two price ranges of “$149,999 and Under” and “$150,000-$199,999”. Both of those price ranges have right at 4 month’s inventory, which is a Seller’s Market. 6 month’s inventory is a balanced market. So more than half of Austin seller’s are enjoying a seller’s market at present. And on up to list prices of about $550K, the market isn’t exactly terrible for sellers in terms of inventory level.
But the winners and losers in this sort of market are really determined by property condition, presentation and marketing. I continue to see many, many homes not properly prepared for market. And I wonder why the listing agent is even contacting me for feedback, as the problems in many of these homes are obvious. It’s hard to remain cordial in some cases. Call for feedback when you have more than 3 crappy photos in your MLS listing and the seller hires a maid. Come on. Some of these listings are embarrassing, Austin Realtors. Get with the program. And these sellers and listing agents are stupidly missing out on prospective buyers who are out looking right now, today, by being lazy and unprepared. Preparing homes for sale seems to be a lot like losing weight. Most people know what needs to happen – there is no secret – but most also fail to follow the simple steps needed to succeed. Thus all the poorly prepared listings currently on the market in Austin and the high percentage of Expired/Withdrawn listings.
Finally, let’s have a graphical look at the Austin real estate market over the past 11 years, which shows the upward trend at a glance. The reality is that 2009 wound up with the second highest average sold price in Austin, ever, beaten only by 2007. And 2009 tied for the highest ever median sold price, again with 2007. Not a bad year when viewed in the proper context of steady, long term appreciation.
My next blog article will be the Austin MLS Area sales breakdown comparison, which will show us which areas in Austin held up well in 2009 and which ones took it on the chin. Preliminary numbers are interesting, as it looks like there will be no strong performing MLS areas for 2009. By that I mean that of the three main metrics we track for price strength, Average, Median and Per SQFT sold prices, not a single MLS area was up in all three of those metrics for 2009. Stay tuned, and I’ll post all those stats after I’m finished evaluating them.
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