"Central Texas is not in the same boat as many other parts of the country. While home sales remain at a slow pace, prices have not dropped, and many economists say an upturn is in the making for 2012 as the region continues to add jobs."
Aside from the fact that the Austin Metro area has continued to create and attract job growth, the prevalence of distressed home sales (short sales and foreclosures) in other markets has had much to do with their declining home values and continuing market malaise. I spoke this afternoon with an agent in San Diego, California who is working with a large number of distressed sales. He is not feeling any of the optimism that I routinely find in conversations with Austin-area agents and brokers.
The McClatchy article included this graphic, showing the national statistics over the past 2 1/2 years:
In contrast, here is the same data for the Austin metropolitan area:
Click on both graphs to enlarge if needed. The important point is how much less impact short sales and foreclosures have had on market conditions in Austin and Central Texas:
- On average, foreclosure sales
represented more than 20% of total sales nationally
in all but 4 months during the period shown. I do not have
the supporting data for that graph, but it appears that the overall
average was in the 24%
range. (RealtyTrac recently reported a national average of
26%. See Foreclosure
Impact in Austin, February 24.)
- In Austin,
on the other hand, foreclosures
only reached 20% of sales once, in February 2011. The
average over the period graphed was 13.5%
-- far below the national average.
- Nationally, short sales comprised about 13% of all sales across this period, dipping as low as 10% in just three months.
- Short sales in Austin averaged 3.3% over the period -- about 1/4 the national rate -- and only reached 5% once.
As I have noted a number of times, distressed sales have been heavily concentrated in relatively few metropolitan market areas, so the contrast between Austin and those cities is even greater. In Austin, given the concentration of foreclosures in specific neighborhoods they had very limited impact on area-wide sale prices. When foreclosures represent 25% to 30% (or more) of sales, however, virtually all sale values are affected, and recovery of those local housing markets is really struggling to gain traction.
The strength of Austin's ultimate recovery in home sales volume -- and the larger economic recovery nationwide -- will depend on new residents' ability to sell homes elsewhere, so this national picture matters significantly to all, but this contrast has clearly benefited Austin and Central Texas throughout the recession and housing downturn.