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Market News and Trends

Market moving toward “normal”?


About a month ago I wrote in Trends to Watch about signs that the Austin/Central Texas residential real estate market might be moderating a bit after 5-plus years of unprecedented boom times.  I didn’t reach any solid conclusion then, and 30 days later the signals are still mixed.  Nonetheless, with final data in for October I want to comment on some related metrics.

One more month of Days to Sell data doesn’t visibly change the graph in my previous post.  The five-year trend in that metric is clearly upward, however.  On the other hand, a look at changes in unit sales and sale prices continues to show a strong market:

The slopes of both lines, now including October 2018 data, look largely unchanged and looking at the rate of change in unit sales seems to support that conclusion:

In this view, it’s clear that the “weakest” year-over-year performance in this market cycle actually happened in mid-2016.  That’s not to say that the “normalization” I wrote about isn’t on the way, but it is an encouraging bit of information for comparison.

Another way to use the same data is to look at month-over-month price changes.  I have also included a 12-month rolling average to filter out seasonality:

This view also shows surprising stability given other changes I wrote about last month.  Still, there has been a clear upward trend in the time it takes to sell a home over the past few years, and the pace of price increases has slowed since 2015:

That resistance to increasing prices correlates with increasing Days to Sell, but doesn’t indicate a sharp downturn for our market.  Indeed, this is the way a healthy, properly-functioning market works.  Sales again outpaced new listing activity last month, and the “months’ supply” figure for the metro area dipped to 2.9 months in October. For now, the forces of supply-and-demand will likely continue to support prices through what may remain a gradual decline.  With that said, it may be a few months before we can tell whether we’re seeing fairly typical seasonality or a fundamental change in our market dynamics.  I will keep you informed.

 

About Bill Morris, Realtor

More than thirty years of business experience (high tech, client service, business organization and start-up, including many 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: -- Seller Representation is a comprehensive process that begins with thorough market analysis and consultation, continues with properly staging the home to achieve the highest price possible in a reasonable time on market, a complete program of marketing and promotion, ongoing updates and communication, closing coordination, and follow-up throughout (and after) the sale. -- Buyer Representation is also full service: shopping, previewing, price and market consultation, contracting, negotiating, coordination of inspections, appraisals, repairs, and closing details, and follow-up beyond the closing of your purchase to ensure your lasting satisfaction. Because the real estate industry is becoming more sophisticated and challenging every day, you need a professional that understands the industry and is positioned to stay ahead of the game. I go the extra mile to help you achieve your goals. That's why I constantly research the market and property values so your home is priced effectively from day one. I also make sure the public knows your home is for sale by using innovative advertising and marketing techniques to attract potential buyers.

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