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Market News and Trends

Market Pace and Pricing


In Update on “days on market” I discussed the relationship between increases in the time it takes to sell a residential property in the Austin area and the change in the ratio of Sales Price to Original List Price. Even though the change in time on market looks subtle, its impact is confirmed by the fact that I receive emails regularly about price reductions in many parts of our area … messages that were very rare or nonexistent a year ago.

As another look at those changes in our marketplace I will look again today at Days to Sell and relate it to year-over-year price appreciation. You will recognize the moving averages graphed below from the older post mentioned above:

Notice that as the last market cycle peaked in 2006 and 2007, the Days to Sell metric reached its lowest point in the cycle. After the mortgage industry crisis and the recession that followed that metric rose dramatically, to a median of almost 60 days in 2011. As the Austin-area real estate market strengthened in 2012 and 2013, Days to Sell dropped precipitously, far lower than its lowest level in the last market cycle. In the second half of 2014 the average Days to Sell began increasing again, with the median lagging just a bit. Both remain lower than their 2007 levels, but the increase has been steady.

As it takes longer to sell, some sellers get impatient and those that are motivated and can afford to adjust begin to reduce their asking prices. This chart zooms in more closely on the current market cycle:

With the Austin market’s recovery from the previous downturn year-over-year increases in sale prices rose, reaching about 9% in 2013 as we consumed inventory. The appreciation rate retreated a bit in 2014, before peaking again in 2015 with a median change of 9.5%. That median has been declining steadily since then — to 1.6% so far in 2019.

Note that the number of listings is essentially unchanged over the past three years, even as the number of sales has increased. One would expect that imbalance to drive prices upward but as more and more home buyers move to the suburbs for more affordable housing. Combined with some market resistance in upper price ranges, escalation in the five-county aggregate of sales prices has slowed.

I have commented before that growth in unit sales in our area is constrained by lack of inventory — not enough homes for sale to serve the demand for them. Based on just our area’s economy and market conditions I don’t see a reason for that to change. Broader changes in the U.S. economy, however, could affect us. Most economists seem to believe we’re at least a year, maybe two, away from a significant shift in the U.S. economy, Presidential election year politics and international economics make the coming year unpredictable, but my forecast is that the market for residential real estate in the Austin metropolitan area will continue much as it is now for the foreseeable future.

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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