Austin Real Estate Blog

The stats are out for January for the Austin real estate market. Sales were very very slow. January 1998 was the last time we saw this few sales in a month. And no that is not a typo.

January is usually the slowest month of the year, and if you adjust for time of the year, November 2008's stats were probably equally as bad or worse. But market stats are usually lower in November on election years. There is no such excuse for the horrible numbers we are seeing this January. Below are the single family home sales stats for the last years:

There were 834 sales in January. It's a 36% decline from a year ago and a 43% decline compared to two years ago.

In essence, starting in September 2007, the Austin real estate market, along with the rest of the country, slowed down because of the subprime issues. For a year the market held steady at its new slower pace. But in October 2008, the market slowed down again. We are also seeing this slow down in other Texas cities.

All of last year we saw no price declines in the Austin market reflected in "official" stats. This occured because less homes in lower price ranges were selling, which artificially inflated median prices. So, in reality, prices were actually down. Now the official stats are showing price declines. The average and median price both are down 6% compared to a year ago.

All of last year we saw no price declines in the Austin market reflected in "official" stats. This occured because less homes in lower price ranges were selling, which artificially inflated median prices. So, in reality, prices were actually down. Now the official stats are showing price declines. The average and median price both are down 6% compared to a year ago.

The list to sold price is down to 94.4%. That means on average a house listed for $100,000 is selling for $94,400. Clearly sellers are becoming more flexible. But as we have said before, in your purchases, it's best to somewhat ignore listing price. You often hear people around the water cooler saying they got a house for 20k less than list. This is meaningless. If the house was overpriced by 40k, it's still a bad deal. You want to get a house under market value not under list price.

So, I have been getting some questions about the condo market. And, yes, although the residential market is doing poorly, the condo market is doing much worse. In particular the high end condo market is moving very slowly. Below is a graph of condo sales broken down by price range. Last month 1 condo priced over 400k sold. There were 363 condos priced over 400k on the market last month. We are seeing more sales with lower priced condos.

The multifamily market is also pretty slow. Two years ago we had 67 sales and last month we had 22 for a 67 percent decline

As far as different areas of Austin are concerned, we continue to see central Austin outperform the suburbs. Lakeway and Lago Vista are doing particularly poorly. The area south of Ben White is strong. Below are links to stats for the different mls areas along with a map of Austin showing the different mls areas.

MLS Map

10N - 8E
8w - HH
HS - PF
RN - WW

Ok, so what is my advice? First for sellers, I keep running into sellers who are a little nuts. We keep running into sellers who only want to show their house when "it's convenient". If we are calling to look at a bunch of houses on a Saturday, it's convenient for the seller to show it at Tuesday at 3pm. With over 10,000 houses on the market a lot of buyers are going to say thanks, but no thanks. With a lot of sellers and few buyers, it's not the time to ask buyers to come back tomorrow, they probably won't.

Also, we are seeing appointment with agent/office person or appointment with owner houses. As a seller, if you run into a listing agent who wants to personally show your property, you need to run from that person. That tactic can help an agent get more clients (basically by peeling them away from the buyer's agent). But, it's also going to affect a house by drastically reducing the number of showings and the chance it's going to sell. It's more convenient, but it's also more convenient to simply not list the house.

For buyers I would say look at houses that need a little work. The buyers in the market now want immaculate houses. Rougher houses are having a harder time selling which is translating to lower prices. Second, lock in your mortgage rate as soon as possible. Mortgage rates are near 40 year lows. They might go down more, but I am more worried about them going up.

So what are we doing? We are currently looking at putting in an offer on a property. I don't see an imminent recovery in the market. I wish I did, but I don't. But, during the down market, I hope to pick up a few properties at low prices and with low interest rates.

As always if you want to see what is currently on the market you can look here Austin Property Search. If you have any questions about the market or a particular house feel free to contact us.