You're reading...
Market News and Trends

Lake Area homes – hot market?


The Austin metro area has become a famous real estate market over the past couple of years — hot, hot, hot!!!

Multiple offers and very quick sales are frustrating for prospective buyers, many of whom make offers for several homes before successfully getting one under contract.  These market conditions can also be discouraging to would-be sellers who want to make a move within the area, but don’t want to sell without knowing where they will move and when.

Obviously that imbalance of supply and demand is also driving sale prices upward.  That is most noticeable the closer you get to Central Austin, but close-in suburbs are also very fast-moving.  Estimates still seem to be that we’re gaining about 110 net new Austinites (metro) per day, and that that will continue for a long time to come.  As I have commented separately, this growth is driven by real economic demand, job growth, and income increases, so these market conditions will likely remain our “normal” for a while yet.

There are market areas and segments, though, that are not enjoying the fast pace.  One of those has been housing on and near the Highland Lakes — Lake Travis specifically, for the purposes of this post.  (Other lakes farther upstream are not as well covered by the Austin/Central Texas MLS (ACTRIS®), so I’ll leave that analysis to others who specialize there.  Of the Highland Lakes only two — Lake Buchanan and Lake Travis — have historically been allowed to fluctuate in elevation, allowing the others to remain “constant level.”  During recent years of drought, those two lakes have suffered.

One metric to compare is “days to sell.”  These charts show compare the Austin metro area to lake-area properties:

Graphs - Median DOM 2005-June 2015

Notice the differences in the scales of those graphs.  The median “days to sell” across the metro area in the first half of 2015 was down to 13 days, compared to 47 days in the Lake Travis area generally, 65 days for homes with views of Lake Travis, and 93 days for homes with Lake Travis frontage.

Another indicator of relative market health is the number of expired listings.  For this measure I focused on the worst of the drought years:

Graph - Expired Listings 2005-June 2015

In 2012, 2013, and 2014, listings for homes with frontage on Lake Travis were 3 times as likely to “fail to sell” as the median across the metro area!  After the wettest May in history, Lake Travis returned to almost normal levels, and sales accelerated in June.  Even with that change, though, Lake Travis frontage listings were 2.4 times as likely to expire as the metro area generally.

As you might expect, those measures of market velocity predict issues related to property values:

Graph - Median Sales Prices 2005-June 2015

That chart is a little messier than the other two because it is based on monthly sales prices for the last 5 1/2 years (dotted lines).  To identify longer term trends I added 12-month moving averages (bold lines).  The trend for the metropolitan area (green line) from 2012 through June 2015 is clear and uninterrupted.  In contrast, lake area properties and even those with lake views have been essentially flat.  On the other hand, notice the steep drop in sales values at the beginning of 2011, when it became clear how severe the drought was, and another steep decline from mid-2014 through mid-2015.

It’s impossible to know whether some renewed strength in June 2015 is the beginning of a trend, but it is clear that the drought has had significant impact on sale-ability and property values on and near Lake Travis.  We have settled into another very dry pattern over the past month now, so time will tell ….

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: A quick footnote — “days to sell” by price range | Bill Morris on Austin Real Estate - December 15, 2015

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: