I had the pleasure of speaking to the Great Hills Ladies’ Club this morning about what’s happening in the Austin real estate market. I outlined what things affect our real estate market, what statistics we watch to spot trends and specific data on current listings and homes sold in the Great Hills area.
Where we are now—
Population of Austin close to 2M; 11th largest city
11,000 real estate agents; Currently 7214 homes for sale (11% more listings than last year)
Last big boom was 2006; Last bust started in 2008
Market correction is due in the future, but how severe. We fared pretty well in the last one.
Real estate is local and cyclical –usually runs in 10 year cycles.
In Austin, economically we are stronger than most. Our job growth is at 7.1% (the average is 6%). The unemployment rate is around 3%, compared to 4.4% in Texas and 4.7% in the US. We have a very diverse economy—State government, the University of Texas, high tech, bio med, music and entertainment. It’s also a mecca for entrepreneurship. Even though the traffic is bad, the good far outweighs the bad. We are on everyone’s top 10 list.
What things affect the real estate market—Things we can control and things we can’t control
Job growth and employment
Stock market—when stocks free fall it shakes consumer confidence; some people get out of stock market and put money into real estate
Consumer confidence—the real estate market freezes when consumers are worried. They don’t make big financial decisions if there is uncertainty.
Affordability—rising taxes, rising costs of utilities and maintenance, building infrastructure
The number of buyers or sellers in the local market at any given time
Educating our client to put them in the most competitive position to buy or sell.
Buyer—preapproved for loan; understanding market dynamics; learn the contracts; written offer letter to go into the presentation
Seller—market ready; professional photography; title work complete; priced correctly; marketing plan executed.
Communication—For buyers it is scanning the market for all sources of homes (silent market, networking groups, social media, letters to neighborhood) For sellers it is following up after each showing, market updates and being available to answer any questions and concerns. Constant communication with both.
What things do I look at monthly to watch for market changes?
Real estate is all about supply and demand—Inventory is a big key. # of houses, seasonal, building or contracting.
More houses on the market and inventory is high, prices drop over time. (Buyer’s market)
Fewer houses, prices increase over time. (Seller’s market)
Months of inventory is a key stat that we look at. Take active number of listings and divide by the numbers of sold in one month. 12 actives divided by 3 solds = 4 months of inventory. If no other houses came onto the market it would take 4 months to sell 12 homes.
Days on Market is another statistic that we watch. How many days is it taking for listings in an area to go from active to pending.
We publish our market report monthly on www.WestAustin.com/market-report
Other things to watch:
Venture capital funds
Tax values and tax rates
Where are we now?
For the past 3-4 years we have experienced 8-10% appreciation in house prices each year. This year, it’s slowed to 5-6%. I see lots of Realtors selling their own properties. For the past 3-4 years we’ve had extremely low inventory, demand has been high, multiple offers, bidding wars, rising prices. Buyers drove until they could qualify. For the first time in a long time, we are starting to see price reductions, lower than asking price offers, appraisals coming in lower than buyers expected even agent bonuses and pleas to Bring Offers. Days on the market are increasing. The average days on the market is 43, 5 days longer than last year. Inventory is building slowly. This usually happens in late summer, but it started earlier this year. Buyers are looking at more homes before making offers, and then making offers at or below list price. They are studying the numbers harder.
What about Great Hills?
Currently 17 homes on the market; In the last 90, days 22 homes sold and closed
List prices ranged from $474,500 to $1,100,000; sold prices $462,500 to $1,000,000
Days on Market 8; Median sq ft. 2650; Median sales price $560,000; Median price per sq ft. $225
Only one zip code selling faster, excellent schools, access, area and subdivision amenities
As always, real estate is local and specific to your neighborhood. To find out the data for your home, I invite you to contact me for a consultation. Thank you to the Great Hills Ladies Club for inviting me to speak.
Laura Duggan, Broker/Owner, West Austin Properties, 3312 River Road, Austin, TX 78703. 512-750-2425; Laura@westaustin.com
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.