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 30th, 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].
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Posted by: Philippine Real Estate | November 08, 2009 at 09:38 PM