Austin Real Estate Market Update – Jan 2010 Stats

The Austin real estate market started 2010 on an upswing. Average sold price is up 5.39% from a year ago, median sold price is up 2.12%, days on market are down. In fact, every measured metric on the chart below moved in a positive direction except for median list price, which is down slightly, but of no consequence. Let’s have a look.

Austin Real Estate Sales Market Update – January 2010
Homes only (condos, duplexes, etc. not included) compiled from Austin MLS data

Dec 2009 Jan 2010 Jan 2009 Yr % Change
# Sold 1323 823 816 0.86%
Avg List $274,819 $259,858 $249,289 4.24%
Med List $199,740 $188,000 $189,700 -0.90%
Avg Sold $262,574 $247,767 $235,101 5.39%
Med Sold $194,000 $184,000 $180,189 2.12%
Sold/List % 95.54% 95.35% 94.31% 1.10%
Avg SQFT 2283 2220 2170 2.30%
Med SQFT 2049 2043 1942 5.20%
Avg $ SQFT $115.01 $111.61 $108.34 3.01%
Avg DOM 82 78 82 -4.88%
Median DOM 48 50 66 -24.24%
# Expired 852 394 544 -27.57%
# Withdrawn 696 577 701 -17.69%
Not Sold 1548 971 1245 -22.01%
Not Sold % 53.92% 54.12% 60.41% -10.40%

So, is this good news? Maybe. I don’t think sellers should get too excited, and buyers need not start worrying about rising prices. Jan 2009 was a down month, so topping it is nothing to brag about. Nevertheless, I do think our Austin real estate market has sunnier weather ahead, at least for the first half of the year.

The extended tax credit and continued low interest rates will motivate buyers in the lower ranges. An improving job market and the return of good job news, (some of which was announced today with Facebook bringing 200 new jobs and a Solar Panel company bring several hundred more), will cause an already “ok” Austin unemployment rate to keep dropping through the summer, barring any terrible macro-economic setbacks in the national economy. Once interest rates starts rising, as we expect later in the year, that will frighten some additional buyers into getting off the fence for fear of missing out on the good rates.

I think the upper end market will be slower to come back as many of the former $500K to $800K buyers will, I think, scale back lifestyles and settle for less Austintacious digs. Mercedes Homes said as much during a lunch presentation I heard today. They’ve redesigned a bunch of new floorplans to accomodate what their research says will be a more frugal market in the $300K and up range, as buyers seek smaller, better quality homes instead of sprawling big layouts. Makes since to me.

Below are some additional charts and stats. Let’s start with the 23 month lookback chart.

Austin Sales Market past 23 months Jan 2010

Above we see the up and down market Austin has experienced the past 23 months.But if we go back two years, to early 2008 when we knew we were headed for possible rough waters, if we had hoped only to see average prices hang in there at around $250K, and median prices to hold on at about $190K, we would have been happy to know that we’d spend the next two years bouncing around between $240K-$260K average, and $180K-$200K median.

I’m not ready to say we won’t see some further erosion of prices this year, or soft pockets in the Austin area, but I wouldn’t argue with someone who thinks the worst is behind us either.

And, certainly, I think, for buyers on the fence, the tie breaker goes to the very low interest rates, tax credit incentives, and the likelihood that we have one sluggish year ahead of us at worst. Also, for move-up buyers, you will have to give up less of a discount selling your current lower priced home than you’ll receive purchasing a more expensive home, so this is a good time for you to seriously consider making a move as well.

Let’s look at the price range breakdown of homes that sold in the Austin area in January.

Price Range #Sold DOM Active Mo. Inv
$149,999 or under 264 61 1886 5.07
$150,000 – $199,999 200 75 1718 5.49
$200,000 – $249,999 102 82 1147 7.31
$250,000 – $299,999 70 92 848 7.50
$300,000 – $349,999 51 71 575 7.63
$350,000 – $399,999 46 79 531 8.70
$400,000 – $449,999 24 114 318 10.26
$450,000 – $499,999 12 138 309 14.71
$500,000 – $549,999 7 80 169 9.57
$550,000 – $599,999 10 94 161 10.98
$600,000 – $699,999 9 177 245 19.34
$700,000 – $799,999 8 99 159 16.45
$800,000 – $899,999 8 133 141 16.27
$900,000 – $999,999 0 0 95 20.36
$1,000,000 or over 13 147 487 29.82

Unless you follow the above chart monthly, you might not know that it’s showing a rising MOI (Months of Inventory). This chart is at once the most useful and least useful for observing and predicting market activity. This is because the numerator used above the denomiator of “Active Listings” is derived from past activity and thus doesn’t necessarily predict future activity.

Also, there are several different ways of determining current volume of sales, none of which are without flaw. Not shown in the chart above is the “number of sales past 90 days” which is divided by 3 to arrive at “current average number of sales per month”. It is that average into which the number of active sales is divided which gives us the “months of Inventory” number. If the market is accelerating, as it may be, the MOI is inflated. If the market is declining, it is deflated.

But months of inventory is an important indicator of market activity, so it can’t be ignored. But we must view it in the context of knowing that November/December sales (which are included in the past 90 days) were pumped up by tax credit buyers. This might happen again in March or April as wave two of first time buyers buyers seek to beat the deadline of April 30, 2010 to write offers.

Having said all that, on face value, the chart indicates a near balanced market up to about the $350K range, with sellers having a slight advantage in the sub $200K range.

We have no Year to Date chart this month, obviously because these are January stats. As usual, questions/comments are welcome.

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