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.
|Month||Historical Average||Average Change||2012 Change|
|Jul ||2,094.40||0.94 ||x|
|Aug ||2,084.70||0.99 ||x|
|Nov ||1,445.70||0.91 ||x|
|Dec ||1,603.10||1.13 ||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.
|Month||Historical Average|| Average Change||2012 Change|
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.