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Market News and Trends

Austin housing most expensive in Texas?


The Austin Business Journal reported yesterday that:

Austin beats all Texas markets but this time, it’s not such a good thing

The article says that the average list price for a 4-bedroom, 2-bath home in Austin is much higher that other cities in Texas.  I have not seen the detailed data, but I am confident that statement is true.  Actual sale prices are more useful to me than what sellers are asking for their homes, but before I get to that information I’ll just comment quickly on list prices:

  • We have been in a very fast-moving market this year, encouraging sellers to price their homes higher than they might in a more competitive environment.  For many that has been a successful strategy.  Others have reached too far.
  • The average list price in the 5-county Austin metro area today is $519,054 — more than 80% higher than the average sale price in the past three months, $284,065.
  • The average time on market for today’s active listing inventory:  85 days.  Average time for those that sold:  39 days.  (Medians:  60 days for active listings; 19 days for sold listings.)

I have not done detailed analysis of the 4-bedroom, 2-bath inventory, but this broad market data and my personal observations from working day-to-day in the market, indicate that averaging list prices necessarily includes “dead” inventory — homes that will not sell as priced, even in our go-go market.

Now, it is a fact that Austin has been relatively higher priced among major Texas cities for a number of years, and our hyper-growth in the past 12 to 18 months has exacerbated that situation.  That’s just the law of supply-and-demand in action.  In 2011, 53.1% of Austin metro home sales were under $200,000.  So far in 2013, that figure is 42.9%.

Yes, tremendous demand in a significantly under-supplied market has pushed prices up, and Austin’s average sale price this year is the highest in the state:

Average Sale Prices, 2003-2013e, 110713

We passed South Padre Island and Collin County in the past year, driven by an 11% increase in average sale price.  Scan down the % Change columns and you’ll see supply-and-demand impacting some other areas in a much bigger way.  Being in the upper tier of Texas home values is not new for Austin.

On the other hand, median sale prices are a little more encouraging:

Median Sale Prices, 2003-2013e, 110713

On this basis, Austin is 5th in the state, with 50% of this month’s sales below $223,700.  (4th YTD with a median price of $222,800.)

I’ll discuss price distribution in our market in a separate post.  For now I just wanted to put our reported “highest in the state” position.  I will also explore the Housing Affordability Index separately, and the Austin Business Journal plans a piece on housing affordability as well.

It is worth noting that the City of Austin has made significant investments in affordable housing in recent years, and voters approved another $65,000,000 for that purpose on November 5. For most purposes, growth and prosperity are good news, but demand outpacing supply makes keeping the least expensive stock available a real challenge.  More to come on this ….

 

 

About Bill Morris, Realtor

Many years of business experience (high tech, client service, business organization and start-up, including 18 years in real estate) tell me that service is the key to success and I look forward to serving you. I represent both buyers and sellers throughout the Austin metropolitan area, which means first-hand market knowledge is brought to bear on serving your needs. Learn more about my background and experience, my commitment to my clients, my profession, and to the real estate industry at CentralTexasHomeSearch.com.

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