Austin Real Estate Update for November
Above is the summary for November 2007 statistics for the Austin real estate market. Here is a further breakdown of those numbers for the last three years.
There are a lot of interesting numbers in these stats. To start off with, the market is clearly down compared to last year. There were 13.05% less sales in November 2007 compared to November 2006, and the number of listings was up by 9.72%.
Although the market is still down, we see a positive trend over the past three months. In September we had a decrease in sales of 22.85% from last year; in October we had a decrease of 16.95%; and in November we had a decrease of 13.05%. Looking at active listings, in September we had increase of 22% from 2006, in October we had a increase of 19% from 2006, and in November we had a increase of 10% from 2006. The last column is Months of Inventory (MOI) on the market. Basically a low months of inventory is good because it shows houses are moving off the market quickly. We jumped up in MOI in September, but it has steadily decreased from September to November. In September we were at 5.52, in October we were at 5.42, and in November we were at 4.79.
The one column that points in a negative direction is the number of pending listings. The number of pendings is a indicator of how many sales we will have next month. And the number of pendings in November (1278) is pretty low which indicates the number of sales in December should be pretty low. So although there were some positive signs in the November stats, I would say we are without a doubt still in a buyers market. And although the November stats looked better than what we have been seeing I am not too positive about what we will see next month.
Before we move away from analyzing these stats, there is one more thing I would like to point out which is the Sold to List Price. This is basically the amount a house sells compared to the list price. The Sold to List Price is going down, which basically shows that sellers are realizing they need to accept lower prices in many cases in order to sell their homes.
Now let's break out statistics for the different submarkets of the Austin Real Estate Market.
The first thing that jumps out is the months of inventory on the market for all areas is under 6. Basically a market that is over 6 months, is a buyers market. When the months of inventory is under 6, we are in a sellers market. Although the months of inventory is under 6 I think we are still in a buyers market.
The suburbs are doing a little worse than the overall market. This is pretty typical. In central Austin, the supply of homes is relatively fixed because all the land has already been built on. Whether the market is strong or weak, the suburbs tend to appreciate slower than central Austin. Second, as we have been seeing the last few months, east Austin has a lot of inventory. Basically the California investors, which are getting hammered at home, are selling off the investment properties they bought in Austin over the last few years. Consequently, areas like east Austin where a high percentage of owners were Californians now have a lot of inventory on the market. In contrast, areas like central and west Austin where there are fewer investors and more owner-occupants are seeing less inventory on the market.
So what is going to happen in 2008 is the million dollar question. A lot of what will happen in 2008 depends on the local and national economy. While I can't predict what will happen, I can say what might be a good move based on what you think will happen in 2008. If you think the national economy is about to tank, you might consider renting or (because rent prices are increasing) look at buying a smaller less expensive house than what you would otherwise be looking at. If you think the Austin market is going to come back and are looking to invest, you should consider looking for some centrally located properties that have positive cashflow. Due to rising rents and sellers that are more flexible we are seeing a lot more properties that generate positive cashflow.
Just in case you want to see some more statistics here are the Austin real estate statistics for the last four years. And of course if you want to look at what is currently available on the market, you can use our Austin MLS Search. And as always, if anyone has any questions about a specific property or you are looking for a real estate agent to help buy or sell a property feel free to give us a call.