You're reading...
Market News and Trends

Case-Shiller Improvements In Context


 Two articles added to AustinMarketInfo.com this morning discuss changes and trends in the U.S. real estate industry (Housing Market In Stumble Mode and Home Prices  in U.S. Cities Up 3.8% From Year Earlier).   As I frequently do, I think it is important to provide an Austin/Central Texas perspective since our local and regional market has experienced the housing downturn and recession very differently than the five states where the worst impacts have been felt.

Both focus on today’s report on the Standard & Poor/Case-Shiller index of home values in April 2010 showed the best year-over-year improvement in more than 3 1/2  years.  That index compiles data from 20 cities around the country and provides a point of reference for market watchers.  It does not provide a way to judge the market  performance over time of any one metro area, particularly one like Austin that is not one of the C-S cities.

For example, looking at Austin in isolation and attempting to compare to the reported change in the C-S index, a casual observer would conclude that Austin is in a weaker position than the indexed cities:  the average home price here rose just 1.6% from April 2009 to April 2010, and the median price was essentially unchanged over that  period.  Obviously, that’s worse than 3.8% growth, right?

These charts may change that perception:

Case-Shiller Index GraphC-S Cities Change From Peak Graph

Any discussion of upward market movement must include a reference to “growth from what?”  In the first graph above you can see that the 20-city index in early 2009  was down almost 20% from a year earlier, and down about 35% from the market peak in 2005-2006.   The second chart details how far each of the 20 cities fell from the  market peak.

Compare that situation to this history of the Austin Metro area:

Monthly Change Avg Sale Price - Austin 2005-2010Average Sale Price - Austin 2005-2010

If you are not able to view those graphs above, they are also linked to PDF versions.  Just click the image area to see the related chart.  Either way, what you will note is  that the Austin Metro area has seen some ups and downs in average home prices since 2005, but we have generally stayed within a range of +/- 8%.   Note, too, that the  trend in home values over the past 5-plus years has still been up.  Our winter markets were weaker than usual in 2008-2009 and 2009-2010, but the direction of change  over time is unmistakable.  

Moreover, as I have noted a number of times elsewhere in my blog, the Austin/Central Texas area remains a bright spot in terms of job creation, new company formation,  and net population in-migration.   Two tax incentive programs over the past year have badly distorted real estate market seasonality, so what the summer holds for us is  somewhat uncertain.  My early analysis indicates that home buyers in our area have continued to execute new purchase contracts even since the April 30 expiration of  the last tax credit program, but one or two months does not make a trend.  We will know more in another few weeks.  I will follow developments and update this page, but my Austin Market Dashboard is always available with up to date monthly data as well.

Advertisements

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

Trackbacks/Pingbacks

  1. Pingback: 2010: BillMorrisRealtor.com in review « Bill Morris' Austin Real Estate Blog - January 2, 2011

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 )

Twitter picture

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

Facebook photo

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

Google+ photo

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

Connecting to %s

%d bloggers like this: