The Heart of Austin

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 patrick@westaustin.com.

An Austin - Dallas – Norman Tradition – Red River Rivalry Weekend!

Pack your bags and get on the road with your burnt orange or crimson and cream, because it is Red River Rivalry time at the Cotton Bowl in Dallas!

Formerly known as the Red River Shootout, this annual football game is one of the greatest rivalries in college football. The Red River itself lies along the Texas-Oklahoma border; representing a dividing line between two states and two states of mind. 

This year’s game will be the 104^th meeting of the two teams and will determine the future of the Texas Longhorn’s National Championship hopes. The Oklahoma Sooners come into the game plagued by injury, youthfulness and two heavy loses. Their goal for the Sooners is to salvage what is left of their season. A win against Texas might be their saving grace.

This blog post is not an analysis of the match up or a prediction of the results. It is a celebration of the tradition. Both schools represent the pinnacle of public school education. Just visit the websites for each school (www.utexas.edu and www.ou.edu) and you will get a feel for how hard hitting both schools are academically.

The Cotton Bowl, in which the game is played, is more storied than the rivalry itself. Visit their website to view the history of the stadium, http://www.attcottonbowl.com/stadium/, and you will be awakened by the spirit of the game of football.

The beauty of the game is that it is always on neutral territory. The stadium sits almost exactly 3 hours from both Universities. Come mid-afternoon today, I-35 Northbound out of Austin and I-35 Southbound out of Norman will be clogged with fans making the trek to Dallas. Checkout the map below for a better idea of how ideal the location really is.

View Red River Rivalry in a larger map

Upon arrival in Dallas awaits the largest State fair in the United States. The Texas State Fair surrounds the stadium and to gain entrance to the game you must pass through roller coaster rides and vendors serving up a plethora of fried concoctions. To learn more about the State Fair of Texas, visit www.bigtex.com.   

 

If you are traveling to the game this weekend, please drive safely. We will see you there!

Patrick Birdsong, West Austin Properties, (512) 345-1252, patrick@westaustin.com.

The Austin Condo Market – September Sales by Price Band

When a market starts to turn south, the first sales to dip are in the condo market. While condos can be a cheaper alternative to buying a home, they also attract a smaller buying pool than homes. The 180 condo sales in Austin represent about 10% of all residential sales during the month of September. Historically, condo sales represent closer to 7-8% of all sales in Austin. This could point to a small trend of homeowners reconsidering how much they are budgeting for their primary residence and choosing a condo as a more economical option. 

As you can see from the chart above, about 96% of condo sales happen below $400,000; whereas only 87% of single family homes sales occurred below $400,000. The month’s of inventory report on the far right of the chart is showing that the lower price ranges are still selling well and overall, we have a balanced market. Buyers in the $200,000 and up range have more selection than they have ever had in the past. 

The portion of the Austin condominium market that is still receiving the most attention right now is the Downtown market. 

If you compare the overall market chart and downtown specific charts above, you will see a few similarities. For the most part, downtown resales over $400,000 have slowed to an inconsistent trickle. The main contributor is competition with the new condo projects. The Austonian (www.theaustonian.com), The Four Seasons Residences (residences.fourseasons.com) and The W Residences (www.block21residences.com) all have about 50% availability. Prices for these condos start in the mid $400’s and go well into the multi-million dollar range. If you are thinking of putting your condo on the resale market, do not make the mistake of ignoring these projects as competition with your condo. All three of these projects will be completed next year and will be more aggressive in their sales approach once they are complete. 

If you are concerned about the value of your condo, sign up for our Market Snapshot program. It is an amazing tool that you can read more about here: http://budurl.com/zaqk 

Look for a complete overview of the Austin real estate market, as well as a complete overview of the Austin condo market in the near future.

Patrick Birdsong, West Austin Properties, (512) 345-1252, patrick@westaustin.com