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Market News and Trends

Signs of Austin-area market progress


Market conditions for residential properties in the Austin/Central Texas area continue improve, and remain better than reports in the national media and far better than conditions in the metro markets that suffered most during the housing downturn over the past few years.

This recent article highlights an important point of reference:

Existing home sales lag, but some statistics point to upturn in Central Texas

I will update my Austin Market Dashboard shortly, but the highlight in that Austin American-Statesman piece is the emphasis on the number of pending contracts for single family homes at the end of May 2011 — up 53% from May 2010.

My readers know that I am skeptical of virtually all single-point comparisons as indicators of market change.  Pending contracts are important as the most current measure of demand, and this is a statistic that is worth following.  Historical perspective almost always helps, though.  With that in mind, here is a look at ten years of pending sales data:

Austin Single Family Homes - May Pending Contracts

With that view, the year-to-year growth mentioned in the Statesman article is visible.  So is an almost equivalent tumble in the previous twelve months.  This looks very much like a repeat of  the pending contract counts we saw in 2008-2009.

What I find most encouraging about this data for May 2011 is that we’re back again to very near the 10-year average, and only slightly below our market’s pre-bubble performance in 2004 and 2005.  We saw this kind of surge in 2009, but this year it was unassisted and undistorted by tax incentives for home buyers.  This time should be more representative of “real” market conditions.

Even more important than the absolute number of pending sales is how that volume relates to total supply — i.e., Pending contracts as a percentage of Active listings.

Austin Single Family Homes - Pendings as % of Active Listings

The shape of year-to-year changes in this view matches the first chart closely except that you can see demand relative to supply was a little inflated in 2005.  Still, though, demand as measured by Pendings at 19.5% last month compares well to the 19% absorption rate using sales actually closed in May 2011.  More on that on the dashboard later.

It is certainly true that closed sales were down from May 2010 to May 2011, but the most immediate measure of market demand clearly shows improvement.  Anecdotally, my business and that of most real estate professionals that I talk to indicate that the pace of market activity is up, and there is plenty of support in local economic reports to expect that we really are on the way to more consistent growth.

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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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