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Market News and Trends

New Home Sales — U.S. and Austin/Central Texas


From Associated Press today (as published by the Austin American-Statesman):

New home sales up, but sales remain slow

As noted in the article, one month does not make a trend, but a 24% increase in new home sales (nationwide) from May to June is good news for many, especially  homebuilders with significant investments in the areas hit hardest by the recession.  As I have pointed out many times, just 5 states have really driven most of the  “national” real estate market news over the past two years — Michigan (whose problems really began long before the mortgage meltdown and the recession), and  California, Arizona, Nevada, and Florida (who enjoyed many years of incredible — and obviously unsustainable — market run-ups before the housing downturn took back  huge portions of those earlier gains.

As always, Austin is experiencing this stage of the downturn and recovery differently from those always newsworthy areas — by being relatively boring.

Compared to the national average of 24% month-to-month increase in new home sales, Austin’s 8% increase seems paltry.  On the other hand, as I pointed out a few weeks  ago (Case-Shiller Improvements In Context), we didn’t have as far to come back, either.  Here’s a snapshot of two years of new home sales in the Austin Metro area:

Austin New Homes Sold June 2008 - June 2010
Clearly, sales are down, and June sales (in Austin and elsewhere) are bolstered somewhat by closings required by the just-expired homebuyer tax credit program.  Third  quarter figures will be more instructive.  The sales valley following last  year’s tax credit program is clearly visible in December 2009 and January 2010.  With that  exception, though, monthly volume has been amazingly stable since April 2009.  Builders in Central Texas have restricted the supply of new homes, which should provide  some cushion against future market softness if it occurs:

Austin New Home Supply and Demand June 2008 - June 2010
An important concern here is a possible shortage in available building sites (lots) if demand ramps up as quickly as some believe it might in the coming months.   Obviously, a dramatic under-supply could drive prices up, but so far this local/regional market has remained relatively stable, as reflected by median new home prices  declining only 8% over the past two years:

Austin Median New Home Prices June 2008 - June 2010
The AP article linked at the top of this post notes that the most important obstacle to a robust housing market at this point is persistent unemployment.  I’ll comment on  that in a separate post, but I have written many times about how differently Austin has experienced that aspect of this recession as well — at least so far.

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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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