I was really surprised yesterday when I did a Google News search on the Austin, TX real estate market. I can usually find a selection of articles describing how the Austin market is so much more stable than the rest of the nation. I was surprised when I found only one article that said Housing Market In Austin Continues Upward:
Austin saw a big jump in home sales last month, according to a report today from the Austin Board of Realtors.
Home sales were up 10 percent last month from January 2011.
Eldon Rude with the real estate tracking firm Metrostudy says the numbers are part of an ongoing recovery of Austin’s housing market.
“That is driven by continued increases in population and household in the region over the last several years, and people beginning to react to increasing rents in the apartment market, and so they’re moving toward the for sale housing market,” Rude said.
When I checked the website of the Austin Board of Realtors last night, I only got an error message when I looked for their press release, so I went to the website of the Texas A&M Real Estate Center, who say they get their information from the Austin Board of Realtors.
It’s true that the 1172 homes sold last month were a 12% improvement over January 2011’s 1047, the improvement is due in large part to the fact that sales in January 2011 were the worst they’ve been in the past two years. Last month’s sales were the second worst.
As poor as the sales numbers were, prices were even worse. The median home price in Austin was down to $176,000 in January. This is a 6.3% drop from December’s median price of $187,800 and down 4.9% from last year’s $185,100. While the median price has bounced around the past few years, the first time that the median price was at this level was in February 2007, so basically Austin’s median is back where it was five years ago.
While these numbers don’t look good, when you look at the inflation adjusted numbers, price “appreciation” is even worse. Here’s a comparison of Austin’s median home price since 1990 in both nominal and inflation adjusted dollars:
In terms of 1990’s dollars, the 2011 price was $110,883. Austin home prices first crossed the $110K mark (in 1990 dollars) in 2001, when the median was $111,143. (in 1990 dollars) Adjusting for inflation then, the case can be made that homes are worth no more now than they were in 2001. This is at least good news for long term mortgage holders, who are paying off their mortgage now with much cheaper 2012 dollars.
The best news for Austin is the tight inventory. In January there was a 4.2 months supply of homes on the market, the lowest number since 2007. How tight the inventory is however really depends on what price point a house is at, however. Sales in the lower end of the market have remained brisk while expensive homes are spending more time on the market.
So does this spell “doom” for Austin’s housing market? I don’t think so, but I wouldn’t concur with “continues upward” either. Perhaps the best headline would be “Austin’s housing market is hanging in there– barely”.