- Austin’s Average Sales Price of single family residences in June ($251,982) decreased by .34% over last month’s average sales price ($252,834), but is UP 8.56% over the average sales price of January ($230,423).
- The number of single family Sales in June was 2,135 which is a 22% increase over the number of sales in May (1,666 homes) and is a 60% increase over the 839 sales that closed in January.
- SELLERS: The Average Sales Prices in Austin have increased this year from a low of $230,000 which was tracking the average prices we experienced in 2006. Since April, the prices have increased to numbers that are more similar to the 2007 and 2008 sales prices and have stabilized around the $250,000 price point. As noted in previous articles, these increasing prices indicated that we were heading for a healthy summer selling season….and that has indeed happened. Why does this happen like this, and why was this predictable? The fundamental laws of economics state that as demand increases and supply either remains the same or decreases, prices MUST rise. This will be further discussed with the graphs below, but our overall message here remains the same as it has all year: This is good news in that perhaps we have seen the bottom and prices will only go up from here -but it also means that if you bought your Austin home in the past few years but are selling it today, your home is most likely worth less than what you paid for it – not worth more. That means you will not be selling for a profit but for a loss. To read more about pricing your home, read Krisstina’s article, “Are You Still Living In A Bubble“.
- BUYERS: Has the market rebounded, and should you buy a home? If we simply review the factual statistics and believe the graphs will continue at an ever-increasing rate, we would all state that we have begun the recovery in the market, and it is time to throw caution to the wind…yet that is not what you will hear me saying! We have been studying the marketplace for a long time, and what we are noticing is either a beginning of a recovery or an artificial spike in activity. The artificial spike may be indicative of a flood of buyers entering the market after sitting on the fence for so long. This could very well be the explanation for the increase in number of sales (DEMAND), the flattening of the active listings (SUPPLY), and the overall result of an increase in PRICE.My assessment is that it is too soon to tell…but this in no way should detract anyone from investigating purchasing a home in the market today, which is aptly described as The Perfect Storm by Krisstina Wise in her most recent article, “Here Come Higher Interest Rates“. In a time when interest rates are at a historic low, coupled with very low home prices, we all get to take advantage of low mortgage payments. Please refer to the article for a brief, simple and thorough description of this situation and what it really means to you.
- Property Virgins (aka First-time Homebuyers): BUY NOW! THERE WILL LIKELY NEVER BE A BETTER TIME TO BUY! Uncle Sam is basically gifting you $8,000, Interest Rates are Low AND Prices are lower than they have been in years. Do you really think you will find a better time to buy your first home? Click on the link for more Info on the First-Time Homebuyer Credit and don’t miss the Housing V conversation with Here Come Higher Interest Rates!
Sales Closed by Month (Demand)It’s beginning to look a lot like 2006….or at least the spike in activity is very similar to what happened then. Since the beginning of the year, 8,714 homes have sold in Austin. In the last month alone, we experienced a 22% increase in the number of homes sold. Clearly, demand has skyrocketed…which is typical of the season, but rare that we would have such a significant increase. As noted in the graph, we can anticipate similar sales for July and August with a decline in the later months of the year.Even though demand for existing homes is high, we must revisit the reality that the real estate market has changed forever. What this means is that sellers must be very competitive in marketing and sales strategies. These strategies can include tactics like: professionally staging the home, upgrading and/or improving the condition of the home to outpace the competition, and pricing the home to be a competitive and seductive opportunity for buyers.Oh, and don’t forget the marketing piece of the strategy … hire only the very best Austin real estate team to take care of your home marketing and sales. In a competitive market like this, you must hire the best. Who is the best and how can you tell? Accomplishments. Period. Find out how the real estate team has performed in the past 12 months, and you will quickly learn who is selling Austin homes in a difficult market.
Active Listings (Supply)Currently there are just over 10,000 Austin homes for sale. This is the second-highest number of homes we have seen on the market in the last 5 years, and demand has yet to reach a point that all the homes are being absorbed. In other words, if no other homes were placed on the market for sale and the demand (number of buyers purchasing homes) remains the same, most of the homes on the market would be sold in just under 5 months. What does this mean? When the absorption rate for the available homes on the market is 5-7 months, this means that we are in a balanced market. We are not in a buyer’s market any longer and we are not in a seller’s market. If you are buying a home in the current market, the best ‘deals’ can be negotiated by a very skilled and knowledgeable agent through finding the terms and conditions in a contract that are most beneficial to you. If you are selling a home, we are consistent with our message: be very competitive and hire the most knowledgeable professionals to help you.
Average Sales PriceAs demand spiked, so did the average sales price. Since the supply (listings) did not increase this summer like it did in 2008, the prices had to increase to satisfy the laws of economics. If we experience a significant increase in the supply and demand falls off this fall, we can anticipate the average sales price to level back off. However, if supply remains flat and the demand falls off slightly like it has historically, the sales price will likely maintain an average between $240,000 and $250,000.It has been requested in the past that I provide data and my interpretations of what is happening in specific price ranges or areas of Austin. If you are interested in the data, please make the request in your response to the article below or call us at 512.892.9473.Simple Summary
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