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Market News and Trends

Market Dashboard – 2017 recap


My regular readers have seen the market dashboard that I have used over the past ten years or so, covering a variety of data from 1990 to present.  In this post I will focus on 2017, with some comparisons to the last couple of market cycles.

First, it won’t surprise anybody who has been paying attention to know that home prices continued to rise in the Austin metro area last year:

Note that, not only have prices been going up in recent years, but also that in 2016 and 2017, they have been consistently above the long-term trend.  The average sale price of a home (house, condo, or townhouse) across the 5-county metropolitan area reached a all-time high of $307,722 in December 2017.  Very limited inventory of homes for sale is the reason for ongoing price pressure:

The dotted green line shows how long existing inventory will last at the current pace of sales.  We have now completed five full years with inventory at or below half of what market economists consider a “balanced” supply (6 to 6 1/2 months’ supply) — the longest and most lopsided seller’s market we have ever experienced.  And that results in competition among buyers for the limited supply.  To put that into perspective, let’s use the long-term view:

“Odds of Selling” means the percentage of active listings that sold each month.  From January 1990 through December 2017, the “odds of selling” averaged 25%.  Note this comparison:

  • This metric reached 40% for the first time in May 1999 and stayed at or above that level  for 12 of the next 16 months, going over 50% for 3 months in early 2000.
  • The next time the “odds of selling” reached 40% was in March 2013.  It has now been at or above 40% for 34 of the next 58 months, going to 50% or higher in 7 months over that time, including December 2017 (the only time that’s happened outside the traditional Spring/Summer selling season).

As I have commented previously, demand for housing in Austin and Central Texas is still being driven by real job creation and resulting population growth, not speculation by over-eager investors.  Market cycles do happen, but I agree with most local market watchers that there is no reason to expect this market strength to be a “bubble” of the kind that burst in 2000 and 2006.

In some ways, we are in uncharted territory here, but most market watchers and local economists expect inventory constraints to remain with us in 2018, and for high demand to continue.  Some geographic areas and price ranges will experience this differently, but it looks like another wild ride ahead this year.  Will we see the market move toward “normal” in the future?  Certainly, but so far it doesn’t look like it will be in 2018.

 

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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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  1. Pingback: Austin Market Price Distribution | Bill Morris on Austin Real Estate - January 26, 2018

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