The latest stats for August 2017 from the Austin Board of Realtors are out and they show some pretty revealing things about where the market is headed, compared to last year.
Resale units sales are down 4% over last year. The median sold home price is up 4.7% over last year. That’s not bad, and I’m actually happy to see appreciation slow down because it’s a sign of a stable market, but it does demonstrate a slower market than we’ve seen in the past few years. Sold price per square foot in Austin is up 6.2%. Pending sales are up 8%.
That’s the rosy part, but here’s the bad news for sellers and the good news for buyers. New listing inventory in Austin is up 31% over last year. Expired listings are up a whopping 43% over last year and withdrawn (where a seller pulls the property off the market before the expiration date) is up 14%. The writing’s on the wall here folks. It’s slowing down. Relatively speaking, we’re still in a healthy market with just under 3 months of inventory, but as the year comes closer to an end, I would expect that number to go up.
Where are we in the real estate cycle?
A few weeks ago I published this blog post on Austin’s economic forecast. The bottom line on that posting is that both experts in the forecasts think that some sort of correction or recession is imminent but that, given the enormous economic stability of Austin’s economy, we should fare much better than most (if not all) major metropolitan cities in America.
Enter Hurricane Harvey
On August 25th Hurricane Harvey made landfall and caused devastation to many cities in Texas, especially in Houston. A dear friend of mine lost everything and so did tens of thousands of others in the city. According to this article by Bloomberg, Houston’s housing market is expected to thrive in the coming months and years. One expert was quoted as saying, “It’s as if we hit a reset button on the market.”
But how will Hurricane Harvey effect Austin’s real estate market? According to Bloomberg, Harvey flooded 113,843 homes. If you look back to Hurricane Katrina in August of 2005, it is estimated that just over 85,000 homes were destroyed. The result? A boom market in Baton Rouge and surrounding areas for years to come, even during the recession.
I would not expect to see as much impact on the Austin market from Harvey as Baton Rouge got from Katrina. The reasons are numerous. For one, Baton Rouge is a lot closer to New Orleans than Austin is to Houston. Also, San Antonio is very close in proximity to Houston, just Austin is to Houston. This means that if there are people that have the ability to work remotely or that are retired, they have two choices in both Austin and San Antonio. I would expect that cost conscious home-buyers would be looking at San Antonio. But for those potential buyers where money isn’t as much of an issue, Austin is likely to be the better choice.
If we see as much as 10% of the impact from Harvey that Baton Rouge saw from Katrina, this will likely be a good bump to the Austin real estate market. Remember, the stats at the beginning of this post are not horrible, they just show a slow down in the market that can result in a better-than-usual buying opportunity for potential home buyers in the Austin area. If I am right about this, we should see the impact of this in as little as two months. I’ve already heard numerous agents talk about relocation buyers looking for homes in Austin. I’ve heard agents looking for homes for their clients in all price ranges, from $300,000 to $2.5 million.
If you’re interested in taking advantage of what could be a temporary lull in the real estate market, the time to act is now. Homes priced over $600,000 are seeing the biggest brunt of the slowdown in the market right now. If you are looking in the $250,000 to $600,000 range, there are opportunities now that I have not seen in years. And if you do get into a multiple offer situation, we have a proven technique to win properties while still giving you the chance to conduct all the due diligence needed to make sure you are buying a sound property.
Contact me here and I can walk you through this. If you’re planning on selling a home in Austin or surrounding areas in the near future, contact me for a consultation on when the perfect time to list that home would be. We have a very comprehensive plan for marketing your home and timing the market so that you reap the most benefits from the economic and natural situations that we are encountering right now.