austin sales 3 - Crossland Real Estate

Should Realtors take over priced listings?

Sylvia and I have turned down some listings recently. We only take listings we think we can sell. The result is, in a market where half of all listings end up Expired or Withdrawn, we just had our first Withdrawn listing in a couple of years last month. And that was because the owner rented the house before we were able to find a buyer. We’ve not lost any listings to Expired status.

To some agents, we are fools. Don’t we know that every listing should generate two new buyers from the sign calls, and therefore even a listing that doesn’t sell is still a listing worth taking? Yes, we know that logic. We know about the 800-number rider signs that would text the Caller ID to us so we can call the buyer back in 3 minutes and try to convert them to an appointment.

We just don’t work that way, nor do we agree with the premise upon which that business strategy is based.

So, there are two basic camps of thought on the issue. One says that listings are supposed to be sold, and if an agent doesn’t think the listing will sell, then don’t take it.

The other point of view is strictly business and numbers. Listings, if marketed properly, generate buyer calls which can be converted to buyer clients who will buy other houses. Who cares if the listing doesn’t sell? Two other sales (on average – if you work it right) will result from having the listing, and that’s good business, right?

Wrong. I disagree with the second line of reasoning, and here’s why.

Austin real estate sales last 12 months

by Steve Crossland

I prepared the graph below for a presentation I did last night to a local Austin real estate investor club. I’ve been commenting to buyers and sellers lately that the Austin real estate market has been “drawing W’s”, which is to say that average sold prices have been taking big swings up and down each month. I decided to put the price swings in graph form to illustrate what I’m talking about. Let’s take a look.
200902-last-12-months-sales-austin-tx

Do you see the W? From August to September 2008, Average sold price dropped over $10K in one month (from high $250s to mid $240s), then it rose slightly in Oct (start of W), then dropped almost $10K again in Nov from mid $240s to the $230s, then jumped over $10K in December back into the $250s, dropped over $10K in Jan back to the mid $230s, then up more than $10K again in February back into the $250s.

I asked the audience of experienced Austin investors at the meeting last night if anyone had an opinion about which direction we’ll see it go in March, and nobody claimed to know. Neither do I. But let’s look at some more stats.

Austin Real Estate Market Update – Dec 2008 and Year End

by Steve Crossland

The Austin real estate market for December 2008 ended better than I predicted. The Austin market held up well throughout 2008, all things considered, and within the context of the national economic climate and the fierce headwinds created by fear and negative consumer sentiment. Before we get into the December stats, the YTD stats and the MLS area breakdowns, let’s take a quick look at the graph below to get a perspective on how the Austin real estate market has performed since 1999.

sales-graph-1999-2008

As you can see above, even though 2008 is down a bit from 2007, it’s not anywhere near the nose dive that most of the rest of the country has experienced. In fact, viewed on the 9 year graph, the small dip is no big deal. It has to be noted that both 2006 and 2007 saw price appreciation of just below 10%, both years setting new record high prices in Austin. Each succeeding year cannot be a new record. Real Estate markets do not produce straight upward sloping lines over time, nor should that be the expectation, so it somewhat puzzles me the degree of concern we hear from buyers and sellers when the market does what it’s suppose to do, but that’s what we’re hearing a lot of lately.

Relax, 2009 may be slightly down as well. But real estate is a long term investment, not a lottery ticket or an ATM machine, as folks came to view it during the early through mid 2000’s. Moving on. Below is the December 2008 stats summary as well as the 2008 vs. 2007 sales comparison and breakdowns by MLS area. First, let’s see how December did.

Austin Real Estate Market Update – Oct 2008 Sales

by Steve Crossland

The number of residential single family home sales in Austin took a 28% dip for Oct 2008 compared to a year ago. The number of “Not Solds” (expired or withdrawn) took a big jump also, to 59% of all listings that departed the Austin MLS in October. These are grim numbers, but the remaining metrics that we track are again holding up pretty well nonetheless. In short, fewer homes are selling, but the ones that do sell are fetching prices near or or above last year’s sales. Most sales currently are for homes selling below $200K.

Let’s look at the breakdown:

• Number of homes sold is down 28% (was down 14% last month) from 1,717 Oct 2007 to 1,227 Oct 2008. Last month (Sept) saw a decrease in the slowing of sales, but this month (Oct) headed back the other way again. I think the remainder of this year is going to be very slow as well.
• Average list prices in Austin were up 1.16% over the same month last year to $259,128.
• Average sold prices in Austin were down 0.29% over the same month last year to $247,687.
• Median sold price was up 5.46% to $195,000.
• Average List to Sold price ratio is 95.58%, down from 96.42% the same month last year.
• Avg sold price per square foot is down 2.13% to $115 compared to $117 a year ago in October.
• Avg days on market is up 4 days (6.15%) from 65 last year to 69 this October.
• Median days on market is up 7 days (16%) from 43 days last year to 50 this year.
• Number of “Not Sold” (exp or withdrawn) is up 29% over the same month last year, to 59% of all removed listings compared to 46% for the same month last year.

The stats outlined above are shown in the chart below.

Austin Real Estate Sales Market Update October 2008
Homes only (condos, duplexes, etc. not included) compiled from Austin MLS data
	Sep 2008	Oct 2008	Oct 2007	Yr % Change
# Sold	1512	1227	1717	-28.54%
Avg List	$257,761	$259,128	$256,148	1.16%
Med List	$189,900	$199,900	$189,900	5.27%
Avg Sold	$248,026	$247,687	$246,978	0.29%
Med Sold	$185,000	$195,000	$184,900	5.46%
Sold/List %	96.22%	95.58%	96.42%	-0.87%
Avg SQFT	2131	2156	2104	2.47%
Med SQFT	1924	1986	1919	3.49%
Avg $ SQFT	$116.39	$114.88	$117.38	-2.13%
Avg DOM	67	69	65	6.15%
Median DOM	48	50	43	16.28%
# Expired	797	666	628	6.05%
# Withdrawn	891	1070	806	32.75%
Not Sold	1688	1736	1434	21.06%
Not Sold %	52.75%	58.59%	45.51%	28.74%

The Year-to-Date figures through Oct 2008 tell a similar story, though less pronounced than Oct. See the chart below:

Should Realtors take over priced listings?

Austin real estate sales last 12 months

Austin Real Estate Market Update – Dec 2008 and Year End

Austin Real Estate Market Update – Oct 2008 Sales

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