Median Home Prices Down?

According to a report from the National Association of Realtors® this week, the median price of resale homes in almost 3/4 of 150 U.S. metros in 3rd Quarter 2011 compared to the same period in 2010.  Click here for details.

NAR’s data shows a 4.8% decline for single family homes in Austin, and a 2.1% increase for condominiums.  I have not tracked prices by product category in my Austin Market Dashboard, but the combined data that I do have, as reported by the Real Estate Center at Texas A&M University shows about a 1% decline overall from 3Q’10 to 3Q’11, so we’re in the right ballpark.

Reviewing monthly Austin Metro median prices reveals a clear trend from pre-recession times to now, noticeably interrupted in July 2010 by the end of our last homebuyer tax incentives:

Isolating just the 3rd quarter numbers from those years shows that this year’s quarterly decline is not especially a concern.  Note price levels in 2011 compared to 2007 and 2008, when we should have been feeling the effects of the housing downturn:

The weakest time for home prices in the Austin/Central Texas market was 2009, and this year’s 3rd quarter median is up 3.5% from that time.

Reviewing the details of NAR’s data shows that most of the cities reporting large increases in home prices this year are among those that have the farthest to go to regain their pre-recession levels.  It is great to see large increases in those cities, and we must all hope this change represents a trend.

On the other hand, Austin’s “slow and steady” performance during the recession means that a dip compared to last year’s very unusual July price spike should not be surprising.  The longer-term view remains encouraging.