February 17, 2013

Austin Real Estate Inventory Hits Record Low



I have been hearing the phrase "it seems like there are not many homes on the market". And the truth is there is not. In fact, the last time we has less than 6 thousand homes on the market was in 2001. Compared to January 2012 the amount of inventory is down 28.5%.

The inventory seems to have fallen more in central Austin. Here are the drops in inventory for the central Austin mls areas.

10N - Down 56.7%
10S - Down 58.1%
1B - Down 38.3%
2 - Down 76.5%
4 - Down 50.0%
6 - Down 63.2%
7 - Down 43.8%

It's hard to know where the market goes from here. While sales are up the one thing that is lowering sales volume is a lack of inventory. Part of the problem is the current waits at the city for permits. Currently the wait for a permit to build or remodel is running around 4-5 months. So there is some pent of inventory we should be seeing released onto the market in the next few months.

September 24, 2012

The Summer is Over - Where Does the Austin Texas Real Estate Market Stand

So the Austin Market so far this year has been more or less on fire. We went from an extremely slow market to a rather heated market. Most analysis of the market has been comparing year over year. So comparing August of this year to August of last year. I find this analysis somewhat uninteresting. Why? We know the market is moving faster than last year. In fact if the market started to cool we would still be outpacing the sales numbers from last year for several months. My question is whether the market is heating up or slowing down month to month. So how does the market of today compare to a few months ago.

In order to do this I compare the rate of change from say July to August compared to the typical rate of change over the last 10 years. First lets look at Sales.

Sales
MonthHistorical AverageAverage Change2012 Change
Jan1,143.400.72 0.67
Feb1,339.201.18 1.22
Mar1,758.801.32 1.45
Apr1,841.301.06 1.03
May2,043.701.11 1.20
Jun2,224.801.09 1.10
Jul 2,094.400.94 0.90
Aug 2,084.700.99 1.04
Sep1,762.700.85 x
Oct1,592.100.91 x
Nov 1,445.700.91 x
Dec 1,603.101.13 x

Generally we don't see much of a change in Sales from July to August. Over the last 10 years on average we have seen a decline of 1%. This year we saw an increase of 4% moving from July to August. But last month we saw the opposite. The number of sales dropped a little more than what is typical.

So in essence the Austin market got pretty hot earlier in the year. Over the last few months the market is not getting hotter or cooler. Its basically maintaining the same level level.

Another data point we like to look is pending sales. These are homes that have accepted contracts but are waiting to close. This is somewhat seen as a future indicator.

Basically for the last two months we are seeing patterns that are almost identical to the change we usually see going from June to July and going from July to August.

















Pending Sales
MonthHistorical Average Average Change2012 Change
Jan1,623.901.301.33
Feb1,734.501.071.18
Mar 2,186.101.261.21
Apr 2,302.501.051.06
May2,252.300.991.05
Jun2,239.701.000.94
Jul2,154.300.970.95
Aug2,036.900.950.96
Sep1,701.500.85x
Oct1,646.600.96x
Nov1,475.400.93x
Dec1,290.500.88x


So in summary the market started hot at the beginning of the summer. Over the last few months the market has not gotten hotter or colder.

Moving forward we expect the market to cool as we move into winter (this is very very typical). We then usually see a spike in January so it will be interesting how the January Bouce compares to the last several years.


As always if you have any specific questions about the market feel free to contact me. You can use our search for Homes in the Austin MLS. If you are looking for a knowledgeable realtor in Austin you can contact me here.

June 30, 2012

Where is the Austin Real Estate Market Headed

So anyone who has been watching the Austin real estate market knows that the market has been incredibly strong for the first half of 2012. All the year over year comparisons show the market to be easily outpacing the sales we saw in 2012.

Sales in May 2012 were up 25% over May 2011. The amount of current inventory on the market is down 23% compared to last year. Generally a market with less than 6 months of inventory is considered a strong market. In May 2011 we had 5.20 months of inventory. In May 2012 we were down to 3.23 months of inventory. This is the lowest months of inventory we have had since August 2006.

So obviously the market is hotter than last year and it has been this way since February. I have talked to some realtors that felt as the summer dragged on the market got hotter and some felt it was cooling down (although it was still doing better than last year). It was an interesting question since the stock market was falling throughout May. The Dow started May at 13279 and was down to 12118.57 by June 1st for a one month drop of 9%.

So how do we determine what is happening in May compared to April. May had more sales than April but historically May always has more sales than April. So to figure it out I looked at the last 10 years of data for the Austin real estate market and looked at the average month to month changes in sales.

Sales
MonthHistorical AverageAverage Change2012 Change
Jan1,143.400.72 0.67
Feb1,339.201.18 1.22
Mar1,758.801.32 1.45
Apr1,841.301.06 1.03
May2,043.701.11 1.22
Jun2,224.801.09 x
Jul 2,094.400.94 x
Aug 2,084.700.99 x
Sep1,762.700.85 x
Oct1,592.100.91 x
Nov 1,445.700.91 x
Dec 1,603.101.13 x

So although April was very strong for the Austin market we see that sales increased 22% from April to May. The average change from April to May is only 11%.

So next let's look at pending sales. This is more of a leading indicator of where the market is going. So again we looked at the historical average for the last 10 years to see the average month to month changes.

Pending Sales
MonthHistorical Average Average Change2012 Change
Jan1,623.901.301.33
Feb1,734.501.071.18
Mar 2,186.101.261.21
Apr 2,302.501.051.06
May2,252.300.991.05
Jun2,239.701.00x
Jul2,154.300.97x
Aug2,036.900.95x
Sep1,701.500.85x
Oct1,646.600.96x
Nov1,475.400.93x
Dec1,290.500.88x

Over the last 10 years on average there are slightly less pending sales recorded in May than in April (down 1%). In 2012 pendings are up 5% in May over the number of pendings in April.

So long story short the market has been hot for the last several months but it seems like, even after accounting for seasonal fluctuations, May was hotter than April. And based on the pending sales data June will probably be hotter than May.

To be honest I was unsure what the data was going to show before I ran the numbers. There has been a lot of pent up demand in the market for the last few years and I thought what we saw early in 2012 was many people that had stayed on the sidelines moving into the market once they felt more confidence in the economy. But apparently at least for now we are working in a hot market that is getting hotter. It will be interesting what the second half of 2012 brings.

As always if you have any specific questions about the market feel free to contact me. If you want to search for properties in the Austin MLS you can use our search here. If you are looking for a knowledgeable realtor in Austin you can contact me here.