Two articles this week focus on residential real estate sales in July:
Austin-area existing home sales up 32 percent in July (Austin American-Statesman)
Sales volume in Austin was down almost 8% in July compared to June. Nationally, the month-to-month decline was 3.5%. It is unusual to see any indicator look worse in the Austin/Central Texas market than nationally. As I have pointed out repeatedly, though, Austin unit sales have been increasing steadily, and substantially, since January 2011 — a trend that most other cities in the U.S. envy.
Year-over-year comparisons are encouraging in both cases — July 2011 up 21% from July 2010 nationally, and up 32% in Austin! In both cases, it is important to note that July 2010 was the first month after the last homebuyer tax incentives expired, so sales were down that month. Still, this is meaningful growth.
Nationally, about 29% of sales were all-cash. In the Austin market, it was 22% in July. Both figures reflect strong activity by investors. (As a pre-recession point of reference, cash sales accounted for about 12.5% of Austin-area sales in 2006.)
Amid a flood of discouraging economic news over the past few weeks, I find this information encouraging. We absolutely have challenges still ahead — residential building permits are still down, housing starts are abysmal, and mortgage underwriting remains tough.
On the other hand, as I suggested in a post last month (So what about the debt ceiling?), investors continue to put money in U.S. Treasuries and other debt instruments, bidding bond prices up and driiving yields down. That is being reflected in very low mortgage interest rates. In most markets there is still plenty of inventory available, and buyers are finding real value. General economic uncertainty aside, I believe that buyers who stay on the sidelines over the next six to twelve months will find that they missed the best opportunity to become homeowners we have seen in many years.
I’ll have more to say about the Austin Metro market specifically when I update my Austin Market Dashboard over the next few days, but feel free to comment here, or call or text or email me and I’ll be happy to discuss specific questions or concerns.