Bill Morris

Signs of market growth in Austin

Market conditions for residential properties in the Austin/Central Texas area continue improve, and remain better than reports in the national media and far better than conditions in the metro markets that suffered most during the housing downturn over the past few years.

This recent article highlights an important point of reference:


I will update my Austin Market Dashboard shortly, but the highlight in that Austin American-Statesman piece is the emphasis on the number of pending contracts for single family homes at the end of May 2011 -- up 53% from May 2010.

My readers know that I am skeptical of virtually all single-point comparisons as indicators of market change.  Pending contracts are important as the most current measure of demand, and this is a statistic that is worth following.  Historical perspective almost always helps, though.  With that in mind, here is a look at ten years of pending sales data:

Austin Single Family Homes - May Pending Contracts

With that view, the year-to-year growth mentioned in the Statesman article is visible.  So is an almost equivalent tumble in the previous twelve months.  This looks very much like a repeat of  the pending contract counts we saw in 2008-2009.

What I find most encouraging about this data for May 2011 is that we're back again to very near the 10-year average, and only slightly below our market's pre-bubble performance in 2004 and 2005.  We saw this kind of surge in 2009, but this year it was unassisted and undistorted by tax incentives for home buyers.  This time should be more representative of "real" market conditions.

Even more important than the absolute number of pending sales is how that volume relates to total supply -- i.e., Pending contracts as a percentage of Active listings.

Austin Single Family Homes - Pendings as % of Active Listings

The shape of year-to-year changes in this view matches the first chart closely except that you can see demand relative to supply was a little inflated in 2005.  Still, though, demand as measured by Pendings at 19.5% last month compares well to the 19% absorption rate using sales actually closed in May 2011.  More on that on the dashboard later.

It is certainly true that closed sales were down from May 2010 to May 2011, but the most immediate measure of market demand clearly shows improvement.  Anecdotally, my business and that of most real estate professionals that I talk to indicate that the pace of market activity is up, and there is plenty of support in local economic reports to expect that we really are on the way to more consistent growth.

Bill F. Morris, ABR, CRS, CDPE, e-PRO, MBA
RE/MAX Capital City
Call or Text:       512-785-3345
Toll-Free:           1-800-692-8784, x 162
Email:                 
bmorris@remax.net
Web:                   www.eHomesByMorris.com  

Your personal referrals are the best measure of my success!

Comment balloon 0 commentsBill Morris • June 29 2011 10:38PM
Signs of market growth in Austin
share
Market conditions for residential properties in the Austin/Central Texas area continue improve, and remain better than reports in the national media and far better than conditions in the metro markets that suffered most during the… more
Austin/Central Texas Home Sales -- May 2011 update
share
Final data for May 2011 is available this morning so I will be updating my Austin Market Dashboard this week. For now I just want to offer a quick summary. First, home sales (units) in Austin and Central Texas are still down year-over… more
A recipe for delaying recovery
share
Hypothetical #1: You have decided it's time to move. You have been in your house for a few years, but it's now too small, or too large, or in the wrong location. We meet to discuss the process of selling your home. I'll go through a detailed… more
Housing vs. new regulations -- not a pretty picture
share
Sometimes the only immediate response to the news is, "AARRGGGHHHHHH! " Here's an interesting pair of articles published by RISMedia: Owning a Home Essential to the American Dream, Survey Says From that piece: “An… more
Home values still strong in Washington D. C., and in Austin
share
Austin, Texas and Washington, D. C. have a lot in common. Both are beautiful cities built on rivers that feature prominently in their ambience. They are also both capital cities, which has much to do with other aspects of the… more
Keep your eye on the target.. those sellers will come around
share
In a couple of recent posts I discussed the market environment in various price ranges around the Austin/Central Texas area, and pointed out that some market segments here are clearly moving well regardless of the "typical… more
Price right, Earn more!
share
An article I found today on TexasRealEstate. com prompts me to revisit a topic that I mentioned a few days ago, and many times before: Prevent your house from languishing on the market The… more
Austin Housing Affordability compared
share
Reported by RISMedia over the Memorial Day weekend: Housing Affordability Rises to Record Levels As always, I was curious about how Texas and Austin stack up compared to other metropolitan areas and to the… more
Austin Market Dashboard through April
share
Final data for April has been in for a few days so it is time for an update. First, here is a snapshot of the Austin Metro residential market as of May 27, 2011: The important point here is the market… more
Price right to sell, downtown Austin and elsewhere
share
A few days ago I wrote about the market environment in which condominiums sell in Downtown Austin That post focused primarily on market absorption rates for 1-, 2-, and 3-bedroom condos. Today, I return to that discussion,… more