We’re about to finish the 1st Quarter of 2018, and there’s every reason to believe it will be another very fast-paced year. In case you’re new to the Austin area or just haven’t been paying attention, this chart will put our market environment in perspective:
“Odds of Selling” is just a snapshot of the percentage of active residential listings that sold each month — in this case, over the past 28 years — in the 5-county Austin metropolitan area. The average over that entire period has been 25%. The average since January 2013 has been 41%, and there were seven months over the past five years in which 50% or more of all active listings sold. Notice that the only other time we reached that pace was in the first half of 2000. This kind of seller’s market lasting for more than five years is truly unprecedented, at least in our area.
The obvious result of high demand and low supply is upward pressure on prices, and this chart bears that out:
Note that that graph covers a shorter timeframe, from near the peak of the last market cycle through February 2018. You can see the brief impact of the 2008 market downturn, and an even briefer interruption before our area moved solidly into positive territory in 2012.
For a longer view of price trends in the Austin area, this chart is more useful:
Good times and bad, for almost 30 years, the Austin metro area has fared well, with prices basically flat following the dot-com bust in 2000 and again after the mortgage industry crisis in 2008 and during the “great recession” that followed.
I will post a more thorough review of my market dashboard when final data for the entire 1st quarter is available in a few weeks. For now, I’ll just say that residential listing inventory across the metro area represented just 2 months’ supply in January and February 2018 (versus the 6 to 6 1/2 months’ inventory that most market economists consider “balanced”). We remain in a seller’s market.
We are likely to see more listing activity in the coming weeks and months but the key, as always, is local job creation and population growth. If those continue as they are now, then demand may continue to outpace supply. I believe that will be the case in 2018, and we should buckle up for another busy year in Austin real estate.