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Market News and Trends, The Business of Real Estate

Austin-area Market Variability — location, location, location


In a previous post (Austin-area Market Variability – first in a series), I discussed variations in market behavior in the Austin metropolitan area, slicing the market only by home size.   In this post I will discuss the importance of location, location, location as a vital factor in real estate.

Using “months of inventory” as a measure of market health, that earlier post showed a range from 4.4 months to 24.2 months.  The  “fastest” size ranges, and the ones with the most unit sales from March through June 2010, were below 2,500 square feet.  I chose one of those for further discussion here — single family homes from 1,000 to 1,500 square feet in size:

Subdivision Area Avg

DOM

Months’

Supply

SP/LP

%

SP$/SF
Briarcreek East 16 4.3 100.73% $69.58
Austin’s Colony East 54 11.1 100.04% $71.60
Quail Creek N. Austin 59 2.6 97.44% $96.26
Sun City Georgetown 63 2.4 97.97% $103.05
Wells Branch N. Austin 33 2.3 98.77% $114.78
Milwood NW Austin 36 3.0 99.14% $120.48
Maple Run S. Austin 20 3.0 99.06% $127.04
Cherry Creek S. Austin 26 1.9 100.36% $130.83
Allandale N. Austin 82 2.5 97.45% $175.86

I chose 9 subdivisions scattered around the metro area that had more sales than most neighborhoods in this size range during the  March-June period.  (Again, this draws on MLS data only.)  Note the sale prices per square foot  from $69.58 to  $175.86 — a 250% range!

The first anomaly that stands out in this data is that one of the lowest priced neighborhoods (Austin’s Colony) is  the worst performing market area, with 11.1 months’ inventory, and one of the highest priced areas  (Cherry Creek) has the highest market velocity among all of those shown.

Interestingly, in three of these neighborhoods sale prices were above list prices — and one of those was the most  over-inventoried market area (Austin’s Colony).   It’s just an indication that sellers (often institutional sellers in that neighborhood) recognized the very competitive market conditions, priced aggressively, and attracted multiple offers.

Also note that there is no direct correlation between price and market velocity. Two of the three fastest-selling neighborhoods (Maple Run and Cherry Creek) were in the highest three markets in price per square foot. In addition, the highest priced market area (Allandale), while carrying very low inventory relative to demand, had the longest time on market and one of the lowest Sale Price-List Price % ratings.

It has long been said that the most important feature of real estate is its location. This data highlights the significant variations that  one factor can have on the value and saleability of a particular property, even within a narrow market segment.  I will explore this  topic further in later posts.

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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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