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Market News and Trends

Latest Case-Shiller Comparison with Austin


I have written a number of times in recent years about the fact that the housing downturn was heavily concentrated in just five states, in less than forty counties nationwide, in fact.  The Austin/Central Texas area entered the recession most of a year behind those hardest-hit locales, experienced very muted recessionary effects, and led the country into recovery.  From the viewpoint of residential real estate, one comparative measure has been provided for many years by Standard & Poors with their Case-Shiller Price Index reports (10-city and 20-city data sets).  (Search “Case-Shiller” at www.BillMorrisRealtor.com for my past articles on the subject.)

In my Austin Market Dashboard, I have tracked the performance of the Austin/Central Texas market for years, and just today I published this chart showing the 12-month rolling average of residential sales (units) and average sale prices:

Annualized data filters out most seasonal effects.  Because 2005 and 2006 were both very fast-paced pre-recession years, we have not yet matched the 2006 peak annualized unit sales, but since August 2012 every month’s rolling average sale price has set a new all-time record.

How does that compare to some key Case-Shiller cities?  Ignoring specific cities for now, here are the indices, compared to Austin’s rolling average sale price:

At the end of this thirteen-plus year period, the Austin metro area and the Case-Shiller cities have enjoyed roughly comparable appreciation in home values.  Keep in mind, however, the very real personal and financial loss that accompanied the bursting of the housing bubble in many of those other cities.  In most of those places, if you bought a home before 2005 and still own it today, you’re about where you started.  But if you purchased a home in one of those cities in 2006 or 2007, it will be a very long time before you recover what you have lost — assuming, of course, that that property hasn’t already been sacrificed in foreclosure or short sale.

Here is another view of that data, this time comparing average home price changes from year to year, and focusing just on the period that encompasses the last of the bubble and then the downturn:

Whereas the Case-Shiller cities, on average, saw home values decline by 35% to 40%, the worst of the downturn in Austin came more than a year later, with property values down about 5%.

This last chart provides data from a few specific cities to compare:

In 2011 and 2012, Washington DC was widely touted as a success story, but Denver provided the best performance among Case-Shiller cities.  Denver, at least, did not experience the huge losses in home value that other places saw.  Even there, though, index values are still below their 2006-2007 peak.  You can see that the broadest — 20-city — Case-Shiller index is at late 2003 levels.  Washington DC and Los Angeles are back to where they were in 2004.

By comparison, Austin’s rolling average sale prices have posted new monthly records in each of the past seven months. There are many factors that contributed to this performance, and probably some legitimate arguments to be had about some of them.  The fact is, though, that Austin has continued to attract employers and employees over the past several years, and conservative home equity lending laws prevented much of the price run-up experienced in places like California.  I’m pleased to call Austin home for many  reasons, and our experience with this most recent recession is just one.

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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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