A few weeks ago the National Association of Realtors® reported: Existing-Home Sales Rise Again in January (02/23/2011). Among the available supporting data were comparisons of single family home sales — units sold and median sale prices — in 20 metropolitan areas and the U.S. average for January 2010 and January 2011. I am always interested in how the Austin/Central Texas market compares to other major cities, so I added that data to create this chart:
You may click that chart to enlarge it. Note that Austin was one of only two cities to experience positive growth in both prices and unit sales over this 12-month period. It was in the top 5 cities for sales growth, and the top 4 for median price growth. Austin’s 5% change in median price was below the 7.8% average rate of increase since 1990, but still a strong performance. Couple that with an increase in unit sales of more than 3x the national average, and this is really impressive.
The NAR report also noted a significant increase in the percentage of cash sales nationally, from 17% of all sales in January 2010 to 23% in January 2011. Austin, too, has seen growth in that ratio:
The total contribution of cash sales in the Austin area remains well below the national average, but the slope of the increase is comparable — from 13.6% in January 2010 to 18.1% in January 2011. Notice the blue line in that chart, however. It shows that the number of cash sales in Austin has been very steady throughout the housing downturn, which Austin and Central Texas entered later than most of the country. The reason for the increase in the percentage of all sales that are cash is that total sales volume declined.
I have not analyzed this level of detail for other market areas, but I suspect we would find the same is largely true. Nervous or discouraged homebuyers, sellers reluctant to list with reduced values, and very real challenges in mortgage loan qualification and in closing mortgage-financed purchases all conspired to reduce total sales. This allowed cash investors to become a larger portion of sales without really increasing their level of activity as much as it appears. In cities with more foreclosures than Austin (see Foreclosure Impact in Austin), large declines in home values undoubtedly allowed investors to buy more units for the same cash, which would account for the difference between 18% cash in Austin vs. 23% cash nationally.
Austin still looks to lead the country out of the housing downturn …. More news to come as 2011 progresses.