The first thing you may notice is that this an over-inventoried market segment, with 126 properties on the market today and only 23 sold in the past six months. (NOTE: These are single family homes only, and only in the selected regions, not the entire metro area. Sales are clearly concentrated geographically, however.)
Sixteen months’ supply is a textbook buyer’s market. The difference here, though, is that 126 homes really isn’t that many in a metro area of 1.5 million people, and buyers in this segment may well be looking for THE house, distinguished uniquely by location, style, size, view, waterfront, pool/no pool, acreage, HOA/no HOA, maintenance required, etc., etc., etc.
And among those that have sold recently, there is a real variety …
Among the smaller homes: about 2800 square feet built in 1939, remodeled in 2008, on a fairly typically sized residential lot — centrally located, with no view, no waterfront, but in just the right place for at least one buyer for $1,000,000 in May 2011:
One of the larger: about 5600 square feet built in 2000 on 1 1/4 acres west of town, near Lake Austin — with very nice (but not spectacular by some local standards) Hill Country views — pool, spa, well-appointed guest quarters, four stone terraces and a balcony — perfect for one buyer for $980,000 in June 2011:
Waterfront: that’s the focus of this one — 3850 SF on 6 acres on Lake Travis — 110′ of frontage on a deep-water section of the lake! This one sold in May 2011 for $950,000. They didn’t even bother to include a picture of the front of this house in the listing because all the “action” is on the lake side:
Views are always in demand in Central Texas: as one example, this one offers 4755 SF on a little more than 1/2 acre overlooking Lake Travis, with pool, spa, outdoor kitchen, and huge patio with VIEWS! Sold in June 2011 for $930,000:
And then there’s “distinctive,” as described by a listing agent: 4800 SF built in 1983 on 1/2 acre, sold in April 2011 for just under $950,000:
Is there new construction in this price range that isn’t reflected in MLS data? Absolutely. Is there more variety in locations than I have included here? Some, but surprisingly not all that much, and not in some really beautiful neighborhoods. Geographic markets in the Austin area that really support $1 million sales are fairly limited. Is there a market for specific styles, like “modern”? Certainly, but oddly enough “traditional” housing and “Keep Austin Weird” go together for the most part. I know of two examples of truly “modern” design sold in the areas covered here in this price range over the past three years, and those were very close to Central Austin. Hill Country and Modern have not often been a successful combo.
As I said at the outset, though, this high-end market segment is largely the domain of buyers who know what they want, and they know that most of our inventory at any point in time is not exactly “that.” When they find it they’ll drive a hard bargain, but ultimately there is a buyer for every home. In this market segment, as in all of real estate: all sales are driven by Location, Property Condition, and Price, and sellers have control over two of those three factors. The rest of the equation is just the motivation of the buyer and the seller, and “market value” is nothing more or less than what a willing buyer and a willing seller agree on for a specific property.