Austin Real Estate Blog

The stats for the Austin real estate market are out. We are by no means out of the woods yet but this is probably the best month we have seen in awhile. Here are the stats for the last few years.

First looking at sales we are seeing a 4 percent decline from last year. While this isn’t great the last 7 months have seen one year declines ranging from 19 to 40 percent. The Average price is down 3 percent. The number of listings is down 7 percent compared to last year which is another somewhat encouraging sign.

So what does all this mean? Did we simply experience a good month or this the proverbial bottom of the market? The short answer is that we will know in six months. But to look at the question in more detail there are two major opposing forces pushing sales right now.

One is historically low interest rates which is encouraging sales. While rates are not as low as they were a few months ago they are lower than at any point before the start of 2009.

The other force is the reluctance of banks to give out loans. It's not just that banks are not giving out loans to subprime borrowers it seems they are looking for almost any excuse to not give out loans. Here are two recently examples. We personally had an offer on a property a few months back. This was the cheapest house on the market in 8 years. It was 30k cheaper than a lot that sold across the street a month before. The bank would not appraise the property. I have no idea what comps they were looking at.

Some banks are also avoiding giving loans to people with "declining income". This means that someone’s income went down from one year to the next. Since we are in the middle of a recession this eliminates a number of people. With some of the lending problems a borrower can find another bank that will make the loan but in most cases buyers will simply assume they can't get a loan anywhere else as well and give up.

So we have one force (low interest rates) with a positive effect on the market and another (restrictive lending) pushing the market down. Basically if interest rates go up and lending remains restrictive it will probably take awhile for the real estate market to recover until it’s buoyed up by a recovery of the general economy. If rates stay low and lending eases we will probably start to see stronger sales numbers over the next few months.

So back to statistics let’s look at the different segments of the Austin real estate market.

This Month

Year to Date

The commercial market is still struggling. Sales are down 67% this month and are down 39% for the year. This is basically due to lending. As strict as lenders are with residential properties this is doubly true with commercial properties. I have talked with some bank lenders that said their bank has pushed up interest rates so high on commercial loans that for all intents and purposes they have exited the commercial lending market. If one can get lending all in all I still like the commercial market.

Condo sales this month are down 11% compared to last year and 38% for the year. I am still not a big fan of the condo market. We overbuilt and even after the market recovers we are going to continue to see problems.

The lot market is pretty dead. It’s down 41% this month and 47% for the year. Lots are frequently sold to builders and builders are not looking to acquire lots in the current market.

Here are stats for the individual mls areas.

Austin MLS stats for May 2009

One thing to keep in mind is that sales in the suburbs are worse than they would seem. As we showed a few months ago the suburbs have a high number of foreclosures compared to the rest of the Austin market.

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.