Austin Real Estate Stats Feb 2009
So what happened in the Austin real estate market in February? For a recap, the Austin market first slowed down in around August 2007 due to the national subprime issues. The market held steady at its new slower pace for around a year. Then we experienced another slow down in October 2008.
So how was Febuary 2009. Adjusting for time of year, the market improved in February 2009 compared to January. But the market is not what it was 2 years ago or even what it was before the most recent slowdown.
One way of looking at it is that the number of sales. January 2009 has the lowest monthly sales we had seen since January 1998. February 2009 had the lowest sales for a February since February 2001. So while it's an improvement, we are still in a very slow market.
Here are sales statistics for the last few years.
Let's look through a few of the numbers. We had 35% less sales than 2 years ago and 28% less sales than last year. Average Price's are up 4% and Median Price's are up 5%. Personally I just don't buy this. Average prices tend to change alot from month to month based on what is selling. If homes under 200k are selling less frequently because of lending restrictions average prices will in turn move up. And in the current market where lenders are changing their restrictions on a regular basis and therefore affecting what price range houses are selling, I would take average prices with a grain of salt.
One positive stat is the number of active listings is roughly steady compared to last year. So while sales are down 28% compared to last year, the number of listings is only up 3 percent.
The next stat is something I get alot of questions about which is list to sold price. Last month we were at 94.6%. This means a house listed for 100k on average would sell for 94.6K. I have alot of people that see a house for 300k and think the market is down so the seller will accept 180k. The short answer is probably not.
[[So what about all these stories of homes selling for next to nothing in places like Detriot, and why don't we see that here. Basically the market is down in Austin but the general expectation is that at some point the Austin market is going to recover. People don't seem to have that expectation about Detriot. Detriot was on a downward spiral before the current national economic mess started. Once the national economy recovers there is no particular reason to think Detriot will be a thriving metropolis. If anything when the national real estate market recovers, Detriot is likely to continue the slow downward spiral it was experiencing before.]]
So lets look at some other property types besides single family houses.
Compared to this time last year condo sales are down 49%. Here are condos sales and inventory for the last 3 years for February
|Year||Sales||Inventory||Months of Inventory|
I am not a big fan of condos from an investment perspective. We simply built way too many condos over a short period of time and it's going to take awhile to work itself out. In addition, even though our inventory levels are currently quite high alot more condos are going to come online in the next 2 or 3 years.
Next let's look at the same statistics for multifamily properties for the last 3 years
|Year||Sales||Inventory||Months of Inventory|
From an investment perspective I like multifamily alot more. If you simply look at the months of inventory on the market, the condo and multifamily market look pretty similar. They were both low in 2007 and have gone up in 2008 and 2009. But the condo market has an inventory problem. Inventory is up 73% in the last two years. In addition, with all the condos coming online the inventory level is likely to go up more in the next year or two.
In contrast, the inventory in the multifamily market is only up 14% in the last two years. With multifamily we have a problem with the number of sales. Sales are down 74.7% in the last two years. This is basically because over the last year banks have done whatever they can to avoid lending money to investors. These restrictions are in response to the high rate of foreclosures from investor owneed properties. Because of the lending restrictions sales of multifamily properties have plummetted. When the economy recovers it's likely some of these restrictions will be pulled back.
One of the restrictions was recently taken out. For the last year most banks would not give more than 4 loans to a single person. They have recently upped that number to 10. It's too early to tell what effect that will have on the market but I would not be surprised if the number of sales in the multifamily market increased over the next few months.
Here are the stats for the different mls areas. We also have a map of the different Austin MLS areas. For the most part, areas with high average prices had very few sales. This is because the high end of the market has been pretty slow the last few months.