You're reading...
Market News and Trends

Home sales down? Yes … and no?


Real estate market activity remains volatile and unpredictable, nationally and in Austin.  Over the past week I have commented on significant month-to-month changes in average home prices (see Home prices decline, but … and Case-Shiller caution — national index, local business).  I have also noted that monthly unit sales have declined in recent months.  In an effort to bring these discussions together, I have assembled several charts that I hope are helpful.

First, the number of homes sold has been down  for four consecutive months from this year’s May-June peak, and from year-ago levels (click image to enlarge.):

Monthly Austin Home Sales 2008-2010

It is worth noting that both of those peaks were “non-seasonal,” influenced by two homebuyer tax credit programs that expired in November 2009 and June 2010, respectively.  Nonetheless, the slow-down was very apparent in the 2nd half of 2010.  (Buyer interest has accelerated in many areas in late October and in November.  Final November data will be available just before Christmas, so we’ll know the real results then.)

At the same time, notice the effect of those tax credit programs on average sale prices:

Monthly Austin Avg Sale Prices 2008-2010

That chart is not an indication of a general change in prices, but instead shows a change in the distribution of sales among various price ranges.  The tax credit programs motivated buyers of lower priced homes much more than buyers at the upper end of the market, so after the expiration of each of those tax credit programs sales of lower priced homes dropped off and upper end sales drove market averages upward.

Combining those volume and price effects, here is a look at the total dollar volume of home sales:

Monthly Austin Dollar Volume 2008-2010

Obviously, that’s still not a pretty picture for July through October 2010, but changing to a year-to-date view offers a somewhat different outlook:

YTD Austin Home Sales 2008-2010

Now, it’s clear that 2009 and 2010 have both been weaker than 2008, at the beginning of the recession but note, too, that for three quarters of 2010 YTD unit sales were equal to or higher than the same time one year earlier.  Again, note that sales in October and November 2009 were influenced by a tax credit for homebuyers who closed by the end of November.  In 2010, on the other hand, November sales dipped more like a “normal” year, so cumulative sales for the year were below 2009 for the first time.

Finally, accumulating monthly dollar volume, here is a YTD view:

YTD Austin Dollar Volume 2008-2010

In this view you can see that the total value of homes sold in the first ten months of 2010 remains higher than 2009.  You can also see the gap narrowing as the effects of the last tax credit program fall further into the past, and this year’s comparison to the November 2009 tax credit is more pronounced.

Again, this year’s real estate market remains volatile and unpredictable, but if we filter out some out of the ordinary market influences from the past couple of years, 2010 doesn’t nearly as dire as some news reports make it sound.  Most analysts expect a slow recovery in the U.S. market in 2011, and many reports predict the Austin/Central Texas area to lead.  Only time will tell, but even in a difficult time we’re more than holding our own.

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: Negative equity declines « Bill Morris' Austin Real Estate Blog - December 14, 2010

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: