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Market News and Trends

2018 Market Recap


The short version of this post is that we still don’t have enough homes for sale to meet very high buyer demand.  I’ll blame a very fast start in 2019 for my delay in writing this.  I have been very busy serving clients.

In one graph here is a snapshot that makes clear the extreme conditions in this very long market cycle:

That is a view of market velocity that clearly shows the contrast between this market cycle and almost thirty years of history in the Austin area. Since 1990 about 26% of active listings, on average, sold each month, with the typical range being between 10% and 30%. In the run-up to the peak in 2000 every month from March 1999 through October 2000 were above that range, with three months above 50%. In contrast, we have now spent 6 years with the odds above 30% of an active listing selling in each month.  The average from January 1990 through December 2012 was 22%, compared with 41% from 2013 through 2018!

The market absorption rate is a move formal view:

In that chart, the green dotted line represents “months’ supply” — how long the listing inventory each month would last at the then-current pace of sales. About six months’ inventory is considered “normal” or “balanced.” For six years the Austin metropolitan area has had between 2 and 3 months’ supply of houses, condominiums, and townhouses for sale.  We have been and remain solidly in “seller’s market” territory.

And that leads to upward price pressure:

The steady increase in average home prices is clear, and if you compare with the two earlier charts you’ll see that with a slight lag, prices fall below the long-term trend in times of higher inventory and slower absorption and move above the trend-line when inventory is lower and market velocity is higher.

2018 finished strong, and with low inventory conditions continuing 2019 looks like another fast-paced year in Austin-area real estate. I have written in recent months about increasing “days to sell” over the past few years, accompanied by a slowing pace of year-to-year price increases. I continue to believe that is what we have ahead this year, but I will keep you updated. In the meantime, I will post an updated look at price distribution in the Austin metro market soon and offer comments on housing affordability in our area — a real reason for concern.

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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