Austin Real Estate Market – A Look at the First 3 Quarters of 2009

Everyone in town has been raving about our small real estate victory in Austin this past week. The big news is that month-over-month single family home sales for September increased from this year over last for the first time since May of 2007. That means we have been in a declining market for 28 months straight and this is the first sign that Austin may be in a recovery. See the chart below for more details.

 

Keep in mind that this only pertains to number of homes sold in Austin. This does not take into consideration the sales price of the homes, the number of days it takes to sale, where these home sales take place in Austin, etc., etc. We will get to that in a bit.

First, I would like to look at the sales for the first three quarters in comparison to the first three quarters of the past decade. This, in my humble opinion, is a better gauge of where we are as a real estate market. As you can see from the chart below, what we have been referring to as normal growth from 2002-2006, was more like a bubble than anything else. What we have been experiencing for the past year is a soft landing, as opposed to a thud. And, can also be considered the natural cycle of a real estate market.

Home Prices

Despite the drop in sales in the market, we have experienced steady average and median home prices. From the chart below you will see that prices are actually up slightly from last year. We have discussed this at length to try and figure out how this is possible with sales being down almost 25% from last year at this time. The only logical reasoning that we can agree on, is that prices have not reached their lowest point. The first time homebuyers rushing into the market really picked up the slack last month, but with the $8,000 tax credit expiring on November 30^th, we may see prices begin to decline.

Day on Market

For those of you in a hurry to sell your home, you may want to pay close attention to the next two charts. The first chart below is the average days on market for the entire year. As you can see, it is taking right around 76 days to sell a home. We haven’t experienced anything like this since the dot-com bust at the turn of the century.

The majority of homes that sit on the market for an extended period of time are still pricing their home as if the market is still moving up. Right now, to sell a home you have to win a beauty contest and a pricing war. In years past you could win one or the other and we are just not seeing much of that anymore.

 

The good news can be found in the following chart. It goes into more detail about when the best time of the year is to sale your home in the shortest amount of time. In previous years, the trend has been the same—sell during the summer. The interesting phenomenon is happening this year, where the average days on the market has dropped almost every month since November of last year.

Home Sales by Price Band, Year-to-Date

In the past we have discussed what sales were doing by price band for a single month. The chart below takes into consideration all sales from the beginning of the year through September.

As you can see, homes priced under $200,000 are still selling at a rather quick pace. With an inventory lasting less than 5 month’s, homes priced under $200,000 are considered to be in a seller’s market.

Homes priced between $200,000 and $400,000 are selling at a decent pace as well. With an inventory lasting between 5-7 month’s, homes priced between $200,000 and $400,000 are considered to be in a balanced market.

Homes priced over $400,000 are having a hard time on the market. With an inventory lasting over 7 month’s, homes priced over $400,000 are considered in a buyer’s market.

Home Sales by Region, Year-to-Date

To break down the market even further, we have divided Austin and the surrounding cities into very distinct regions. From the chart below you can see how well sales are doing across Central Texas, including the average prices and days on market. The region experiencing the best market right now is Southwest Austin. The region experiencing the worst of the down market is Northwest Travis County. This region includes many properties on Lake Travis, which has been severely hurt by the two-year long drought. Hopefully, with the rain coming down in buckets, the market will be on its way to recovery.

 

This is a lot to take in and a lot to process. If you are considering selling your home in the near future, the best way to gauge the value of your home is to have an experienced Realtor visit your property and take into consideration all the factors that may affect the value of your home.

If you aren’t quite ready for that step, you can always sign up for our Market Snapshot program. It is an amazing tool that you can read more about here: http://budurl.com/zaqk

Patrick Birdsong is a Realtor with West Austin Properties. He is a second generation Realtor with over 7 years of experience in the Austin Real Estate Market. He can be reached at (512) 345-1252 or via email at [email protected].

Comments

[Philippine Real Estate]

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