Typically, the Austin/Central Texas market is behaving differently. In this case, sales of existing homes in June 2010 were down compared to June 2009, even with the effect of the recently expired tax incentives for homebuyers. The good news is that last year was strong in Texas, relative to the news-making markets in California, Arizona, Nevada, Florida, and Michigan:
Of course, there is real reason for concern about the next three months in particular: Note the fall-off in sales last December, January, and February, after the expiration of the previous homebuyer tax credits.
Other market behavior here is reason for confidence in the performance of our market over the next year:
As you can see, listing inventory has grown in recent months -- a normal seasonal trend, maybe exaggerated this year by pent-up desire to sell by homeowners frustrated over the past couple of years. The magnitude of that change is fairly benign at just 9% compared to June 2008. At the same time, buyer demand is down by 9% over two years, but June 2010 sales were still 20% higher than October 2009, when purchases driven by last year's tax credits peaked -- not bad for a market in which seasonal demand has been significantly distorted by external incentives.
Look at what that demand did to the median sale price here in June 2010:
The ramp in 2nd quarter 2010 looks huge, but note that the June 2010 median price was only up 5% compared to June 2008, and just 3.7% from June 2009. That pace of growth is entirely reasonable and sustainable. Will we see some softness over the next few months? I wouldn't be at all surprised, but look at one last market statistic and you'll see continuing strength in our market:
The average resale home that closed in June 2010 was on the market for just 70 days! The five states that have so heavily influenced national news about real estate in the last two years would undoubtedly envy that market velocity. Yes, it is up from 51 days in June 2008, but the average over 24 months was 66 days on market. That's not a market where houses are "flying off the shelf," but it is not one where inventory sits for months and months, either. With about 7 months' supply available, the Austin/Central Texas market remains reasonably balanced : buyers have plenty of choices, but a well-prepared and well-priced home will sell in a reasonable time. That's the way this is supposed to work.