Markets operate in cycles, and the Austin real estate market is no different. As I have written many times, we have avoided the most severe effects of the mortgage/housing crisis and recession over the past couple of years.
One indication of market resilience is price stability, and although we have not enjoyed signficant value appreciation, we have not suffered the loss of value that many areas have experienced. The average sale price in December 2009 was about 4% higher than in January 2008, and the median price increased about 2% during that same two-year period.
We all read and hear so much bad news about the national real estate market that keeping a realistic perspective about the Austin/Central Texas area is difficult. Considering that the hardest-hit markets have seen property values decline by 20% to 50%, consider the strength that this chart shows:
The top half of that page shows residential sales by price range from 1998 through 2009. I have highlighted the price ranges that represented 10% or more of each year’s sales. Note that there has been virtually no change in that distribution from 2007 to 2009 — the period of the recession. Even compared to the market peak in 2006, prices remained strong and showed slight migration toward higher prices by the end of 2009.
The bottom half of the price distribution summary simply accumulates the sales percentages from the top half. Instead of discussing median price as a statistical measure, this chart, in simple, visual terms, is an attempt to answer the question: “If a home buyer wanted to see half of all available listings, how high would the price range have to be?”
You can see that in 2000, shopping up to $160,000 would have covered more than 1/2 of all available homes. By 2007, you would have to look up to $200,000 to reach the same part of the market, and that didn’t change in 2008 or 2009.
This chart and a wealth of other market data is always available at www.AustinMarketDashboard.com. You will see there that average and median prices in our area fell from December to January. That isn’t unusual, but it was exaggerated this time because it followed an unusual price spike in December. Still, the price decline in January gets us back to about the same point as in January 2007 and 2008, and we’re still above January 2006.