Austin Real Estate Market Update – Nov 2009

Maybe I should start terming my Austin real estate market update blogs “Austin Real Estate Market, as Influenced by the Federal Government”. Indeed, the word “market” does need an asterisk next to it for the Sept-Nov time frame in Austin. Instead of taking its natural course, whatever that might have been, the lower end of the market was stimulated by government incentives for the Latter part of 2009 through November, and the sub-$200K buyers responded. Thus we see on the graph below the drastic drop in the average and median sold price for November 2009 as the final batch of first time home buyer tax credit sales closed.

Austin Real Estate sales graph Nov 2009

It’s not hard to see what the real estate market is doing, but it is hard to know for sure why it’s doing it, or, that is, to what extent the number of sales (way up) and the average/median values (down) are influenced by these the artificially low interest rates and the buyer incentives, both being caused by government intervention in the market. Some economist believe that once these stimulus measures peter out, as they will later this year, the national real estate market is in for another big drop in prices as foreclosures will snowball to the highest levels we’ve seen yet.

So what does all of this mean for Austin? Is Austin real estate in generally good enough shape to ride it out better than most markets? I think so. Let’s have a look at the November stats.

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Austin Real Estate Market Update – Oct 2009 Stats

October saw a huge 31% increase in the number of sales in Austin over the same month last year. Remember though, Oct 2008 took a 28% dip from the year prior, so while this October did see a good increase in sales volume, due in part to the $8,000 tax credit program, we’re comparing a dreadful month one year prior to a turbo-charged market this year, thus the big swing. Nonetheless, brisk sales for October was not an unwelcome result.

Let’s take a quick look at the monthly home sales prices in Austin for the past 20 months.

Austin-Real Estate Sales Last 20 Months



You can see that May 08 and May 09 were both the peak sales prices in their respective years and that sales prices drop in the off seasons. This year is no different but our sales volume has picked up more than usual.

Let’s see in the graph below how October 09 compares in all the metrics to October 2008.

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Austin Real Estate Sale Stats by MLS Area – Sept 2009 YTD

Austin’s real estate market is a “market of markets”, and thus the overall news reported about real estate activity in the Austin Metro area may or may not be reflective of conditions in the specific area in which you live, or the home you own, or the home you want to buy. Each quarter I break down the Austin Real Estate market year-to-date stats into MLS area-specific comparisons of the year before so we can take a look at the variations among different pockets of Austin.

If you follow these quarterly Austin MLS breakdowns, you know that there is always variation among different MLS areas and price ranges, for better or worse. This Year-to-Date report through Sept 2009 is a head scratcher for me though, mainly because the number of Austin MLS areas that normally outperform the overall market has dwindled substantially. Based on what Sylvia and I are experiencing in the field, I would have guessed the opposite to be true. And the market overall is holding up.

But here’s what I’m talking about …

Of the 44 Austin Metro MLS areas tracked below…
5 Austin MLS areas had an increase in average sold prices (3 months ago it was 11)
7 Austin MLS areas had an increase in median sold prices (3 months ago it was 11)
1 Austin MLS area had an increase in average sold price per square foot (3 months ago it was 7).
4 of the Austin MLS areas saw a decrease in average days on market (same as 3 months ago)
7 of the Austin MLS areas saw a decrease in median days on market (3 months ago it was 6).
1 (only 1) Austin MLS area saw an increase in the three main pricing metrics – avg and median sold, and price per square foot. Three areas were in this clug at mid-year.

So does this mean the Austin real estate market is getting worse? As usual, it depends. From a statistical standpoint, more areas are trending down than up. But if you ask Sylvia and I if we’re busy, yes we are. We had 4 closings in October and three on the board already for November, which is unusual for the slow season. On the other hand, if you ask an agent who specializes in luxury homes in Lakeway, they will probably say things are dismal. And I do in fact have a listing on 10 acres in Dripping Springs that isn’t getting any showings even though we think it’s under priced.

Add in the government interference/intervention in normal real estate market activity with the tax credit incentives, the nervous jitters of the stock market, artificially low interest rates, appraisal issues, and what we have is a number of variables pulling and tugging with and against one another. Bottom line, overall, at 3% down for the year on average sold price and about even on medial sold price, Austin’s market is doing about what we think it should, as a whole. It’s just interesting to see all the underlying cross currents.

That said, below is the breakdown summary, then you can study the chart yourself and see how your areas of interest are doing. As usual, questions and comments are welcome.

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Austin Real Estate Market Update for August 2009 Sales

Austin Real Estate values for August 2009 are down about 5% from the same month last year. Average sales prices for the 1,657 houses that sold are down 5.12%. Median sold prices are down 4.80%. The number of houses sold is down 15% from August 2008, which is less of a decrease than we’ve seen for most of the past 12+ months.  The sold to list price gap is 96%, which is the same as a year ago and the same as last month. The average list price was $257K and the average sold price $247K, so the average home is selling for about $10K below the final list price. Note that this measures the gap only between the last list price, not the original list price. Unfortunately I have to work harder to obtain the ration of sold to original list price so I don’t calculate it monthly, but my best guess is that it’s probably somewhere between 90% to 92%.

The Days on Market keep climbing, now at 73 days average and 43 days median on market. Even though that’s higher than last year, those are still fairl decent DOM numbers.

The Not Solds (Expired and Withdrawn listings) continue to be fairly high at 45%. This means that of all the listings that departed the MLS in August (no longer Active for Sale), 45% of the listings departed as failed sales efforts. This tells us what we already know, which is that many sellers are not desperate and they refuse to drop their list price below whatever mental threshhold they’ve established, regardless of what the market data says. This in turn is keeping our sold prices reasonably stable but also may be creating a shadow inventory of pent up future listings that will come online in the next 2 or 3 years once seller perceive a better selling environment.

Below is the chart comparing August with the month and year before. Further below is the usual collection of monthly charts and graphs.

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

Jul 2009 Aug 2009 Aug 2008 Yr % Change
# Sold 1972 1657 1948 -14.94%
Avg List $258,562 $256,663 $270,759 -5.21%
Med List $199,900 $197,500 $206,352 -4.29%
Avg Sold $248,984 $247,072 $260,411 -5.12%
Med Sold $195,000 $190,400 $200,000 -4.80%
Sold/List % 96.30% 96.26% 96.18% 0.09%
Avg SQFT 2184 2199 2191 0.37%
Med SQFT 1981 1971 1992 -1.05%
Avg $ SQFT $114.00 $112.36 $118.85 -5.47%
Avg DOM 70 73 64 14.06%
Median DOM 44 43 44 -2.27%
# Expired 476 491 740 -33.65%
# Withdrawn 825 900 876 2.74%
Not Sold 1301 1391 1616 -13.92%
Not Sold % 39.75% 45.64% 45.34% 0.65%



Next is the Year to data chart showing how our Austin real estate market is doing compared to the market at the same point in 2008.

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Austin Real Estate Market Update – July 2009 Stats

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
# Sold 2031 1950 2017 -3.32%
Avg List $264,959 $259,167 $269,724 -3.91%
Med List $206,000 $199,900 $203,000 -1.53%
Avg Sold $254,059 $249,560 $260,832 -4.32%
Med Sold $200,000 $195,000 $198,000 -1.52%
Sold/List % 95.89% 96.29% 96.70% -0.42%
Avg SQFT 2221 2188 2166 1.02%
Med SQFT 2012 1985 1962 1.17%
Avg $ SQFT $114.39 $114.06 $120.42 -5.28%
Avg DOM 77 71 61 16.39%
Median DOM 48 44 39 12.82%
# Expired 392 476 537 -11.36%
# Withdrawn 679 825 881 -6.36%
Not Sold 1071 1301 1418 -8.25%
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

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Real Estate Market at Bottom in Most Texas Cities

This just in from my Texas A and M Real Estate Center eNewsletter:

COLLEGE STATION— “It appears we are at the bottom of the housing market in most Texas cities,” said Real Estate Center Director Mark Dotzour after reviewing the state’s latest home sale numbers.

Dotzour mentioned two years ago that new home construction needed to fall dramatically to avoid the level of overbuilding that could damage Texas housing markets. He even picked summer 2009 as the bottom of the housing cycle because bankers would constrain credit to homebuilders and developers.

Apparently he was right on all counts. The Texas inventory of unsold new and existing homes is in good shape.

“I feel now is the time to buy a house in most Texas cities,” he said. “Housing affordability has never been higher, and I never thought I would see 5 percent mortgages in my lifetime. If you plan to live in the house for at least two or three years, now is the time to buy.

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