January 2013 Austin Market Update

There are a lot of interesting aspects of Austin’s economy to comment on and be excited about.  Depending on your perspective, they are extremely encouraging and possibly somewhat frustrating.  Last year saw a marked shift in Austin’s real estate market.  One metric I watch is called Months of Inventory which is basically how many months it would take for all currently active homes to sell if no other homes came on the market.  6-6.5 MOI is basically considered a balanced market and if that number is lower, we are trending towards a seller’s market and as it goes higher, we are trending towards a buyer’s market.  Well from June of 2012 to December of 2012, that number dropped from 4.5 to 2.7 and will likely continue to drop some more.  As a comparison, during the Dot Com boom of the late 90s, MOI went from 4.0 in August of 1998 to 3.0 in January of 1999 to 2.0 in January of 2000.  This current drop has been a much steeper one.

What does this indicate?  Well, in general, we have an extremely tight inventory of homes in a lot of areas and a fairly broad price range.  It is a much tougher market for buyers to buy in with multiple offers becoming fairly commonplace and prices rising strongly into the foreseeable future.  Buyers need to be prepared and have expert guidance to get the home they want.  A positive aspect of this is that this new growth phase is likely still in its early stages, so you can expect prices to continue to rise more until inventories loosen up.  Also, for the time being, interest rates continue to be incredibly low, offsetting some of the pain of the prices.

What are some of the causes of this boom in the Austin real estate market?  There are many but some of the main factors are Austin’s strong growth.  We’ve had 65,000 plus people move to town in each of the last 2 years and that trend isn’t slowing down.  As a result of the recession, construction of multifamily dwellings is way behind our population growth and will take awhile to catch up.  Also, new home construction is only about half of what it was back in 2006 and is slow to catch up too.

Here are some highlights of last year’s Austin real estate market:

22,496 single family homes sold which is a 19% increase from 2011

24,941 homes went pending in 2012 which was a 19% increase from 2011

2012 Median Sales Price was $205,000 which is 6% above 2011

Average Days on Market was 69, down 15 days from 2011

31,441 new listings came on the market in 2012, down 3% from 2011

$6.2 Billion in sales volume for 2012.  Up 26% from 2011

Gracy Title Austin Market Update 2013

September Market Update

Well, Austin home sales are clearly in a new trend.  Having studied and charted Austin real estate sales trends for many years now, I’ve witnessed many different turning points in our market.  The most recent happened between April and May when our monthly sales broke out of the sales levels of the last 4 years and has been sustained since then (the blue line on the graph below).  The next big breakthrough will be when we exceed 2005 & 2006 monthly sales numbers.  I’m not going to touch a prediction on that with a 10 foot pole though,  and just hope it is sooner than later.  We should surpass 2007 numbers next month but at this point in 2007 our monthly home sales were already in a decline in the early stages of the recession.  All in all, barring some major negative economic news, it looks like Austin’s real estate market is back in a sustainable growth period.

Housing inventories continue to be the big challenge in our market.  Augusts’ numbers show our listing levels at the lowest they’ve been compared to any of the years I have tracked going all the way back to 2001 while at the same time, sales are 54% higher than they were at this time in 2001.  Not surprisingly, Austin’s months of inventory continues to remain incredibly low indicating a strong seller’s market in closer in neighborhoods.

Can you believe how low mortgage interest rates have gotten?  Current 30 year fixed rates are at 3.5%!  How does that translate into savings you might ask?  Well, consider that you wanted to borrow $200,000 on a home purchase at 4.5% as recently as last winter or spring.  You could now purchase $25,000 more home for the same principal and interest payment at today’s rate.  So even though home values are starting to go up, interest rates are keeping home affordability at historically high levels.   It’s a great time to buy or refinance!

Whether you are thinking about buying or selling, a great way to get started is to go to my web site at www.PeterDennison.com and download a copy of my Home Buying Guide or Home Selling Guide.  Just click on the appropriate icon at the bottom of my home page & download your free copy.   I’ll give you a call and we can schedule a time to meet, discuss your goals and put a plan together to achieve them.

July Austin Market Update

Sales for May & June finally broke out of the trend we had been in for the last 4 years and are now approaching the range we experienced back in 2006 & 2007.  The only difference is that our inventory of homes is much lower now and in some cases is actually likely slowing down sales as buyers have to wait for the right home or miss out due to multiple offers in some parts of the Austin market.   Though our inventory has gradually been growing since the beginning of the year, it has been dramatically outpaced by the growth in sales.  Sales probably reached their seasonal peak in June but ought to remain healthy throughout the remainder of the year.

 

 

 

 

 

 

 

 

As I have mentioned before, a lack of inventory has been the big story this year.  We haven’t seen levels this low since back in 2001 when sales numbers were also much lower.  Many of Austin’s closer in neighborhoods are experiencing a heavy shortage leading to lots of multiple offers and driving prices up substantially.

The monthly pending count continues to outpace the last 4 years and clearly shows Austin’s real estate market is steadily in recovery mode.  It will be interesting to see how soon we reach 2006 levels.

Interest rates continue to amaze, settling in at new record lows over the last few weeks with 30 year fixed rates at or around 3.75%!  If you aren’t thinking about selling any time soon, you might want to look at refinancing to lock in some long term savings.  Call me for a recommendation to a quality lender.   Looking at Austin’s record level median home values, it’s clear that these low rates are allowing people to buy a little more house than they could even a year ago.

Whether you are thinking about buying or selling, a great way to get started is to go to my web site at www.PeterDennison.com and download a copy of my Home Buying Guide or Home Selling Guide.  Just click on the appropriate icon at the bottom of my home page & download your free copy.   I’ll give you a call and we can schedule a time to meet, discuss your goals and put a plan together to achieve them.

May Austin Market Update

Fasten your seatbelts ladies & gentlemen, we’re in for quite a ride!  What a difference a few months makes.  As I’ve mentioned in previous posts, sales have been picking up in the Austin real estate market but now they are really taking off and we’ve experienced a strong shift in sales in the last few months.  It’s an unusual market.  Some neighborhoods have already seen a tremendous rise in home values just in the last few months.  If you’ve been looking to buy since late last year, be prepared to have to pay more for similar homes than you would have at the beginning of the year.  At the same time though, with interest rates hovering around 4% and below, affordability is still at record highs.  Historically speaking, in the last 11 years, Austin’s housing market has been pretty soft for 9 of those 11 years.  Since 2001, median sales price is only up about 37%.  So we are probably long overdue for a period of strong sales and appreciation, at least for awhile

Sales the last 2 months have been tracking along with those of 2008 and 2010 when we were deep into the effects of the homebuyer tax credit bump.  I expect that May’s numbers will find Austin home sales exceeding those 2 years.

With the exception of 2010’s home buyer tax credit affected market, April’s number of pending homes in Austin is substantially outpacing monthly pending sales for the last 4 years.  This is a strong positive sign for our market moving forward.

Our housing inventory in Austin remains incredibly tight and is not likely to change much in the foreseeable  future.  The best houses in the best neighborhoods are going quick and often with multiple offers.

For those of you considering buying, it’s time to get prepared and pre-approved.  You might not be getting a home at the bottom of the market, but you haven’t missed it by much and we are likely to see an extended period of appreciation.  Home sellers, now is the time to take advantage of a resurgent market.

Whether you are thinking about buying or selling, a great way to get started is to go to my web site at www.PeterDennison.com and download a copy of my Home Buying Guide or Home Selling Guide.  Just click on the appropriate icon at the bottom of my home page & download your free copy.   I’ll give you a call and we can schedule a time to meet, discuss your goals and put a plan together to achieve them.

Austin’s Strong Seller’s Market

As I have been commenting in my posts since last fall, we have been seeing a steady decline in listing inventory since early last Summer.  In June 2011, we were at a peak of 6.9 months of inventory and have watched it drop month by month to its current most recent numbers of 4.2 months in January.  It has actually reached a point where in many neighborhoods there are buyers waiting for a house to come on the market and multiple offers have seen a large increase.  This is likely to be a situation that doesn’t last too long as potential sellers who have been holding off see the opportunity and list their homes.  The months of inventory number may not change for quite a few months but we are probably going to see a big increase in both new listings  and properties going pending each month as current buyers waiting to buy are absorbed.  Then the months of inventory will rise back towards a more balanced market.  Now is a great opportunity for home sellers to get a jump on their competition, get their homes sold quickly, for top dollar and less hassles.

Austin Historical Home Sales and Average Price Trend

This graph from the Texas A&M Real Estate Center really shows the spike in home sales Austin experienced from 2005 – 2007.  Interestingly, we didn’t see much if any of a spike in the average sales price.  I expect we will see pretty steady growth in the number of sales over the next few years as Austin’s healthy economy becomes even stronger.

Austin area home sales and average price since 1979

February Austin Market Update

January 2012 has started off on a strong note with home sales up 10.4% over 2011 and 22.5% above 2010.  Also noteworthy is that January pending sales were up 16.2% over 2011 indicating a continuing trend into the new year.  On the graphs below, note the orange dot indicating January’s results for sales and pendings.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A trend that I’ve been watching grow since last summer is the consistently declining level of active inventory for buyers to choose from.  January’s active inventory is down 19.5% from a year ago.  Couple that with increasing sales and you have a rapidly shifting market.  In some neighborhoods and price ranges, homes are selling very quickly, for top dollar and in many cases, with multiple offers.  Demand is steadily picking up but supply is still overly constrained.  I think the supply issue will likely work itself out this Spring and Summer as more and more sellers who have been holding off selling their homes for the last couple of years decide to move forward.  My biggest concern is that it doesn’t happen fast enough and forces sales to slow down because of a lack of choice for buyers.  I know this is already happening to some small extent already.  So, if you are one of those homeowners considering selling this year, you may benefit from acting sooner rather than later when supply begins correcting itself relative to demand.

 

 

 

 

 

 

 

For those of you considering buying, it’s time to get prepared and pre-approved.  Austin’s current housing affordability stands at 1.95 which is very favorable for buyers.  Housing affordability is the ratio of the median family income to the cost of an 80% loan at median home prices.  Historically low interest rates around 4% for the last several months make Austin home buying incredibly affordable right now and these rates can’t last forever.    

Whether you are thinking about buying or selling, a great way to get started is to go to my web site at www.PeterDennison.com and download a copy of my Home Buying Guide or Home Selling Guide.  Just click on the appropriate icon at the bottom of my home page & download your free copy.   I’ll give you a call and we can schedule a time to meet, discuss your goals and put a plan together to achieve them.

January Austin Market Update

Now that the numbers are in, how did the Austin real estate market fair in 2011?  Pretty much as expected, we saw steady though slow improvement throughout the year.  2011 was the first year since the market crash that there wasn’t a federal homebuyer tax credit affecting the market & yet we still managed to improve.  Homes are actually more affordable now that they were with the credits especially considering that interest rates are around 1% lower than they were then.

So how did we stack up?  Well, home sales units were up 7% over 2010, sales volume was up 9%, 12% less homes were put on the market in 2011 and active inventory was 15% lower at year end.  With increased sales and decreased active properties, we have seen our months of inventory drop to just 4.1 months.  This indicates a pretty healthy seller’s market.  A balanced market tends to be around 6-6.5 months of inventory.  Anyone considering selling would be well advised to take advantage of this opportunity.  I expect that we will see this number rise during the year as the last few years pent up intent to sale begins to loosen up, more sellers put their houses on the market and we shift back to more of a balanced market.

Another positive note is that year end pending properties beat the previous 3 years, indicating a continuing trend of an improving market and increased sales.  From all I’ve read, 2012 isn’t expected to be a dramatically stronger market but should show steady growth.  Expectations are that 2013 & 2014 will show an even stronger improvement.

Austin is long overdue for a really robust market though we are fortunate not to have suffered the massive declines experienced in many parts of the country.  Average to slightly below average appreciation in the Austin housing market in the first decade of the twenty first century coupled with one of the country’s healthiest economies allowed us to weather the storm better than just about anywhere else.

December Austin Market Update

As 2011 draws to a close, it looks like this year will end up slightly improved over the last 2 years in total sales.  Better yet, it looks like a trend that will continue.  Right now we are about 5.8% above 2010’s sales through November and less than 1% above 2009’s numbers.  But based on the pending numbers, this year’s December sales should top both the previous years’.

Active listing inventory tells an interesting story.  In addition to it being so low, new listings each month have been lower 10 out of the last 11 months.  When supplies get this tight, a lack of more marketable homes can cause some buyers to leave the market and either continue to rent or choose not to sell their existing home.  That has been a more common than usual event this year.  My expectations are that we will see a bit of an increase in inventory going into the Spring next year.

November Austin Market Update

Austin’s housing market has performed slightly on the positive side of where I expected it to this Fall.  Sales have been consistently better than a year ago since June and have tracked closer to 2009 sales that were boosted by the first homebuyer tax credit.

Based on current pending numbers, I’m cautiously optimistic that we will end 2011 & start 2012 showing an improvement over the last 3 years.

Our active listing inventory continues to decline relative to the last 3 years and is comparable to levels back in 2006 when more was selling and that was keeping inventories low.  Now I think that many potential sellers are just holding off for the time being and that will only change when there is more consistent positive economic news.  Or for those who are holding off but are considering a move up or move down, they will get motivated when interest rates start to climb again.

Now is a great opportunity for those of you looking to sell & buy.  You can still get a good price for your home and interest rates will allow you to save a lot over the long term in your new home.  The challenge right now may be finding the right new home in today’s limited inventory.