You're reading...
Market News and Trends

1st Quarter 2019 – Market imbalance continued


2019 promises to be another fast-paced year for residential real estate in the Austin area. Listing inventory finished the quarter at 2.4 months’ supply, versus the 6.5 months’ most market analysts consider “normal” or “balanced”. There some mixed signals, however.

For example, the number of homes (houses, condos, and townhouses) sold in 1Q ’19 was up just 1.3% from the same period in 2018. For comparison, unit sales grew 6.5% from 1Q ‘ 17 to 1Q ’18. Likewise, the average sale price rose just 0.9% from 1Q ’18 to 1Q ‘ 19, compared to a 4.1% increase from 1Q ’17 to 1Q ’18. These charts show more details, including the 12-month moving averages:

You can see that unit sales growth has been sporadic since 2014, but dipped noticeably in the second half of 2016 and again from October 2018 through March 2019. Year-over-year price growth has been declining fairly steadily since 2015.

As I have noted many times, the Central Texas economy continues to create jobs and to attract population growth and accompanying development. A critical challenge is building enough housing to support the growth. Demand is high but sales are gridlocked by the lack of available homes, especially under $300,000. I noted in More on Austin-area Home Prices that 60% of 2018 sales were between $200,000 and $400,000, but there are only five mostly small suburban cities where more than half of sales were below $300,000, and in Home Prices in Austin you can see that in 2018 the percentage of homes priced $200,000 to $250,000 declined from 2017 — the first decrease ever in that price range.

Finally (for this post), the five-year trend of increasing “days to sell” appears to continue:

By no means is an average of 60 to 70 days to sell “slow” in historical terms, and I actually expect the 12-month moving average of this metric to level off somewhat this year. Notice that the last time this measure bottomed was as the mortgage crisis began in 2007, and the peak in the middle of that chart was just as we turned the corner into the current market cycle.

There is no sign now of the kind of disruption we saw in 2007-2008. We are simply being held back at this point by a shortage of housing available for sale. More news on this to come ….

 

 

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.

Discussion

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: