As temperatures in Austin start to broil, the real estate market typically starts to cool this time of the year. This year, sales began to slow a little earlier than normal causing real estate agents to wonder a little earlier than usual why their listings aren’t flying off the market like they were a few months ago. Part of the answer is that seasonally, we always have a build up in sales during the late winter and early spring months then a crest generally around mid July. This year that peak came at the beginning of June.
Do you think buyers are just worn out? Rising prices, multiple offers on multiple properties, investors with cash and the sheer number of buyers competing for homes can wear a buyer out. Buyers may be waiting for the market to cool slightly, prices to level off and for fewer buyers to be competing for the fall inventory. We’ve had more pending home sales in July than in the past 8 years, but there is also a higher inventory, almost 12% more homes for sale than last year at this time. More inventory, fewer buyers. In most price ranges, we are moving from an extreme seller’s market (under $500,000) to a more normal seller’s market. ($500,000 to $1M). Over $1M we go to a normal to an extreme buyer’s market.
It’s hard to believe that there are 139 homes in the MLS, and a number more that are on the silent market, above $3,000,000. Luxury home sales have been slower this year than last and I expect that trend to continue at least into next year. Falling oil prices, market instability, the economic woes overseas and an unpredictable election year are causing luxury home buyers to sit on the sidelines. Even in Austin where our economy is fed by many different sources and our outlook remains good, housing at the luxury end will see increased days on market and prices falling as they go up price band.
Real estate is local, and as always, we invite you to contact us directly for specific data in your areas of interest. We are here to serve you! For a copy of our latest Market Report, visit our website.
Submitted by Laura Duggan, REALTOR, 512-750-2425, firstname.lastname@example.org
West Austin Properties, 3312 River Road, Austin, TX 78703.
As we begin the new year, the Austin real estate market continues at a strong pace. The average sold price in our market is up 12.4% over the same time last year, and more homes sold in December than in any previous December. In fact, our holidays were filled with more buyer showings and closings than in recent memory. Take a look at all of the sales by zip code and price band in our January 2016 Real Estate Market Report.
Demand for homes is still high with the consistent growth in our city causing homes to continue to appreciate at sometimes double digit rates. Even in the first week of January our buyers have been competing for houses that have received multiple offers, a phenom that usually takes place during the spring and summer months. For the last 6 months, pendings have been at record levels.
Currently, there are just under 5000 homes on the market in the Austin MLS., a few more than in the previous two years but still way short of normal. That number translates to an average of 2.3 months of inventory, still a buyer’s market.
Dr. Ted Jones, Chief Economist at The Real Estate Center at Texas A&M, gave Austin a “full speed ahead” rating for Austin in 2016 today at his Outlook for Real Estate and the Economy because of our strong job growth. Jones reports that we have more jobs than ever before in our history and that our retail boom is just beginning. Income here went up 6.6% of last year and new companies are relocating their headquarters and regional offices here. To those coming in, our real estate is still a bargain compared to the places they are leaving. Jones also predicted that the Austin market won’t be affected by rising interest rates, that he said would reach 5.5% or by the oil industry because of our growth.
Real estate is local. If we can help you with an equity analysis of your current home or help you start building equity in another one, please call on us. We are all natives and happy to help you with all of your real estate needs. As Jones pointed out, real estate has proven time and again that it is the very best investment one can make. That certainly proves true for Austin, Texas.
Submitted by Laura Duggan, Broker, West Austin Properties, 3312 River Road, Austin, Texas 78703. 512-750-2425 and Laura@WestAustin.com
As of October 3rd, there is a new Federal rule (the TILA-RESPA Integrated Disclosure rule) that governs lenders who make mortgage loans to consumers. The old rule required lenders to give 3 loan disclosures to home buyers–the Good Faith Estimate (GFE), the Truth in Lending (TIL) and the Settlement Statement (HUD). The Feds thought these three were confusing to borrowers and have replaced them with two new disclosures. The new rule also requires all lenders to use the same loan application and disclosure form called a Loan Estimate form. The idea is that buyers can more easily compare lenders’ rates and fees. The second one is the Closing Disclosure, which replaces the Settlement Statement (HUD). These new disclosures require new processes.
Title companies used to prepare these statements and deliver them to buyers and their agents prior to closing for their review, but now the lender is responsible for the compliance and delivery of these disclosures. The lender must provide the Closing Disclosure at least three business days prior to closing, now called the loan consummation. The timeline for this rule counts Saturdays as a business day, but not Sundays and Federal holidays. No changes can be made to the Closing Disclosure during that three day period. If a change is required, the three day timeline starts over. This is the part where patience may play a big role as there will no doubt be unexpected delays when changes are made. Lenders may still ask title companies to prepare and send the Closing Disclosures to their clients and continue to perform the Loan Consummation. (closing)
Another change is that your real estate agent will have to get permission from their client in writing on a promulgated form for the lender or the title company to release any information to them. We will provide these forms to our clients when we prepare our representation agreements.
What do these changes mean for our clients? The entire process is going to take longer. Financing and closing a home used to take 30-45 days. Now, we expect it to take 45-60 days from contract until to consummation to close a loan. We can, however, recommend a number of excellent (and honest!) lenders who can provide the proper disclosures and get loans closed in the most timely manner possible. The learning curve will be steep for all parties, so working with a highly experienced lender will be important.
Posted by Laura Duggan and Katy Freshour, West Austin Properties, 3312 River Road, Austin, TX 78703, 512-750-2425 (Laura), email@example.com, 512-826-4310 (Katy), firstname.lastname@example.org
As the days get shorter, Austin home sales are following normal Fall patterns with fewer sales and more days on market than other times of the year for most areas and price ranges. However, even though sales have declined for the past two months as they do this time of year, the market is still strong especially in the lower price points. The actual number of sales in September was highest of any September. August homes were on the market for the fewest days in Austin history pushing the number of pending home sales to the highest number of any September.
Of the 4409 homes for sale valued at less than $500,000, almost half of them sold in September. This makes this price point an Extreme Seller’s Market with an average of only 2.1 months of inventory. Months of inventory increases as the price point increases. See Sales by Price Band in our full report.
The very upper end of the market is not performing nearly as well. Of the 941 homes for sale over $900,000, only 63 sold in September giving us an average of 15 months of inventory. That is if no other homes came onto the market in this price range, it would take 15 months to sell them all. We call anything over 12 months an Extreme Buyer’s Market. At that rate, there is downward pressure on home prices while sellers compete for the next sale.
For the past three years we have seen overall appreciation in the Austin market, but this trend is slowing. The price increase in 2013 was 8.9%, in 2014 it was 7.1% and so far this year it has been 4.6%. Low interest rates and a robust job market have fueled the demand and appreciation for the past 3 years.
What could change all of that? Real estate is, after all, cyclical. Lots of factors can lead to a dip in the market or at least further slowing of sales and appreciation. Some factors to watch are led by an increase in interest rates promised by the Federal Reserve Board for later this year. It wouldn’t surprise me if they started taking them up this month. A rise in rates usually impacts our stock market negatively and causes buyers in the upper end to be more cautious slowing sales in the segment. Falling oil prices could also be a factor especially here in Texas as jobs are lost in related industries. Look for job layoffs as a signal. Thankfully, we aren’t as oil dependent as we once were in our economy.
As always, we are happy to consult with you on the purchase or sale of a property here in the Austin area. We watch the market closely and are ready to serve you with all of your real estate needs. To look at the market by price band and zip code, take a look at our full October Real Estate Market Report.
Posted by Laura Duggan, Broker, West Austin Properties, 3312 River Road, Austin, TX 78731. 512-750-2425 or email@example.com