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Austin Real Estate Market Statistics - May 2009

So in a number of recent conversations I have heard something along the lines of "Well I don't know about the rest of the country but the Austin real estate market is back". And yes usually I have heard this from realtors. Is this true? In a word "no". There are some very preliminary signs the market is improving but assertions that suggest the market has moved out of the slump are not based on the data. Announcements that the market has recovered are often accompanied by the statement "we are seeing multiple offer situations again". (This is when a seller has more than one offer to choose from). Here is a little secret. There are always multiple offer situations. If a seller prices a property significantly lower than the market average, they will usually receive multiple offers. Here are the stats.

Yr Month Sales % 1 Yr Change % 2 Yr Change Average Price % Price Change Median Price % Price Change Active Listings % Change Pending Sales Sold to List Price
07 Jan 1,475 $241,169 $175,000 7,060 2,186 96.9%
07 Feb 1,723 $233,936 $176,000 7,334 2,499 97.0%
07 Mar 2,315 $245,391 $177,000 7,776 2,934 97.0%
07 Apr 2,295 $249,912 $185,000 8,354 3,016 97.6%
07 May 2,698 $250,156 $184,050 8,821 3,125 97.8%
07 Jun 2,772 $259,310 $191,800 9,159 2,789 97.7%
07 Jul 2,621 $257,386 $189,900 9,451 2,573 97.2%
07 Aug 2,497 $259,686 $191,250 9,819 2,196 97.1%
07 Sep 1,816 $252,844 $182,500 9,979 1,695 96.2%
07 Oct 1,770 $242,399 $180,000 9,431 1,953 96.4%
07 Nov 1,648 $248,768 $185,000 8,069 1,278 95.9%
07 Dec 1,638 $251,123 $190,000 8,522 1,006 96.0%
08 Jan 1,312 -0.11 $245,305 0.02 $187,000 0.07 8,727 0.24 1,935 95.4%
08 Feb 1,547 -0.1 $233,945 0 $180,090 0.02 9,127 0.24 1,803 96.1%
08 Mar 1,829 -0.21 $239,777 -0.02 $188,000 0.06 9,638 0.24 2,063 95.9%
08 Apr 1,944 -0.15 $240,592 -0.04 $186,950 0.01 10,034 0.2 2,109 96.5%
08 May 2,108 -0.22 $261,580 0.05 $195,000 0.06 10,577 0.2 2,146 96.9%
08 Jun 2,222 -0.2 $259,114 0 $199,940 0.04 10,886 0.19 1,996 96.4%
08 Jul 2,068 -0.21 $256,526 0 $195,000 0.03 10,913 0.15 2,032 96.7%
08 Aug 1,993 -0.2 $256,335 -0.01 $196,500 0.03 10,348 0.05 1,792 96.2%
08 Sep 1,673 -0.08 $241,881 -0.04 $182,000 0 10,217 0.02 1,520 96.2%
08 Oct 1,322 -0.25 $243,364 0 $192,460 0.07 9,944 0.05 1,234 95.4%
08 Nov 997 -0.4 $234,444 -0.06 $182,000 -0.02 9,243 0.15 1,147 94.9%
08 Dec 1,304 -0.2 $246,930 -0.02 $182,500 -0.04 8,520 0 1,114 94.2%
09 Jan 839 -0.36 -0.43 $230,423 -0.06 $176,500 -0.06 8,738 0 1,327 94.3%
09 Feb 1,106 -0.29 -0.36 $241,167 0.03 $189,900 0.05 9,373 0.03 1,406 94.7%
09 Mar 1,396 -0.24 -0.4 $230,256 -0.04 $180,330 -0.04 9,704 0.01 1,846 95.1%
09 Apr 1,550 -0.2 -0.32 $231,236 -0.04 $188,930 0.01 9,889 -0.01 1,919 95.6%
09 May 1,707 -0.19 -0.37 $253,608 -0.03 $193,000 -0.01 9,939 -0.06 2,132 95.7%
Yr Month Sales % 1 Yr Change % 2 Yr Change Average Price % Price Change Median Price % Price Change Active Listings % Change Pending Sales Sold to List Price

We had 1707 sales in May 2009. This is down 19% from a year ago and down 37% from two years ago. The fact that we are down 19% from May 2008 (which was considered a down market) doesn't really fit my definition of the market having "recovered".

So is the Austin market seeing some signs of improvement? Maybe? The stats from April and May of this year are somewhat improved from what we saw in January, February, and March of 2009.

The number of sales in May 2009 is twice what we saw in January 2009. But this has more to do with seasonal variations. There are always more sales in the summer. It's better to look at sales from one month and compare it to the same month from one and two years ago. So for January 2009 we see

Month Sales One Year Decline Two Year Decline
January 839 -36% -43%

Compared to April and May we see:

Month Sales One Year Decline Two Year Decline
April 1,550 -20% -32%
May 1,707 -19% -37%

So there are some signs of an improvement but we are without a doubt in a depressed real estate market.

While we are talking about overly optimistic predictions, here is another one: "Due to pent up demand, once the economy recovers the Austin real estate market is going to be red hot". I don't think this is likely. Basically once the economy recovers mortgage rates should increase, which should slow down the market. (although once mortgage rates eventually start to move back down I expect prices to increase as we talked about in inflation and real estate). So if one is looking to buy, in the short term I would be more concerned with buying before mortgage rates increase rather than before prices increase.

Oh and winner of crazy real estate pronouncements. "The condo market is going to have a scarcity of supply soon". I heard this last week. There is actually some bizarre logic behind this. Basically so many condos are having extreme difficultly with sales that they are moving toward leasing the units instead of selling them. The problem I have with this is that there is such a huge oversupply of condos right now that even taking out some of the condo buildings by leasing them is unlikely to lead to a normal volume of condos much less to a scarcity of condos. The second issue is that a number of out of town investors purchased Austin condos that are still being constructed. Once the condos are completed, it's likely we are going to see a number of these units back on the market.

So is now a bad time to purchase something? If the plan is to buy a property and sell it in a short period of time maybe so. The time on market is pretty high right now. When flipping a property, holding it for several months can eat through potential profit. I would also not be looking at buying land to immediately develop for the same reason. If the plan is to buy and hold for a few years before selling, the outlook is more positive. Prices and mortgage rates are both pretty low. The trick of course is getting a mortgage. While mortgage rates are quite low, banks are more restrictive than they have been in a long time.

So let's look at some other sectors of the market:


Basically the condo, farm, multifamily and commercial markets are all doing worse than the residential market. While part of this has to do with demand, it's also due to lending. While the lending market for residential has tightened the lending market for other property types like commercial and multifamily has seen more restrictions.

As always if you have any questions about the market in general or a property in particular feel free to contact us. If you want to search for properties on market here is our Austin home search.