SoCo / South Congress Austin Real Estate Update...

Good afternoon and happy Friday!

Ok, I have had several clients interested in the South Congress/SoCo area in Austin. Things have been changing in this area so I thought you all might like to hear about the latest and the greatest.

Here's the deal: There are currently 49 active homes available in the South Congress area with 21 others under contract. Over the past 3 months 21 homes have sold. At this rate of absorption there is 7 months of inventory. Equilibrium is 6 months, so these numbers are not particularly high, but does show availability in the market place.

I am pleased with the number of homes under contract. This shows that activity in this area has started to increase. Sales in SoCo were somewhat sluggish in November and December of last year. 6 Homes sold in November with an average days on market (DOM) of 91 days. The original list to sales price (OL/SP) was an unimpressive 87.32%. This indicates that sellers were forced to be more flexible in pricing in order to find real buyers. December saw improvement; 7 homes sold with a OL/SP of 90.49%, but the DOM figure increased to 104 days.

OL/SP for the past few months is over 90% and DOM has been a fresh 73 days...yeah, that's nice. Over the past week or two new listings have started to hit the market. Many of the markets in Austin have been waiting for new homes to hit the market as much of the sluggish inventory has been on the market for some time. The "new blood" in the market signifies that sellers are more comfortable with marketing their homes and buyers will certainly welcome the new options. Additionally, 21 pending homes is an excellent sign for sellers in the SoCo area, especially as we get closer to summer. The sharp increase in number of homes in escrow shows that Austin's South Congress area is waking up for the summer buying season. I anticipate the inventory will start to decrease over the next months as more buyers pull the trigger. As more homes sell, sellers will be more inclined to list their homes so this churn should keep numbers closer to equilibrium rather than a sharp drop in supply.

So, things look good for South Congress as we move closer to the summer. No doubt people will start to spend more time outdoors, at First Thursdays and enjoying Austin, for the popular SoCo we know what that means...more activity across the board.

Thanks for reading...now it's time for dinner, cocktails and the sunset!

Marcus Cox

More about me:
www.marcuspeacecox.com
More about my company:
www.avalaraustin.com

Stop Paying attention to month over month comparisons...

Hi Guys,

I hope all is well with you. Today we are going to bust open a commonly misunderstood statistical favorite. That would be the monthly performance comparisons based on the year, month over month comparisons. (ie. Sales June 2010 are up 32% compared to June 2009.)

I'll spoil the ending for you...they are meaningless.

You will often see these numbers reported in the newspaper or in real estate updates written by title companies or agents. These figures are interesting and they do fill up space, but at the end of the day the actual value of these figures is quite low. Real estate is all about trends and the pushing or pulling of interest rates, consumer confidence, the economy on the whole, local economic indicators, neighborhood, price range etc. So, because of these factors what happened last June really has no bearing at all on what happens this June and thus the numbers are cotton-candy (feel good, but no nutrition) rather than a secret weapon for the consumer.

How many people like looking at real estate in the rain? No one. Nobody likes looking for homes in the rain. Something as innocent as two weeks of rain during a busy buying season can throw numbers off. It is very important to look past the stats and try to discover the real meaning.

"Sales are up" or "sales are down" make for great headlines, but they are only meaningful if compared to applicable market data. Thus, if sales this month are up over last month this could be an indicator that the market is changing. (POP QUIZ: What are the three indicators that a market is changing? Answer...days on market, months inventory and list to sale price ratio) But, sales differences from a year ago fail to show any trends of a heating or cooling market. The figures do not show what has happened between now and then.

So...when your looking at real estate statistics be sure to look past the month over month comparisons and focus your attention on what the market did last month and the month before. Also, remember in the Austin market, that real estate has been so local that one street can be hot and another just around the corner is not. With this type of environment trends even in a particular zip-code can be deceiving.

Talk to you all soon!

Marcus

What is real estate like in your neck of the woods?

Hi All,

We have a lot of readers from all over the Texas real estate spectrum. Are you curious about what's happening in your neighborhood in central Texas or on the coast? Email me and I will be happy to post an update on your specific area.

Looking forward to helping!

Best,

Marcus

North 1B Luxury Comps – Highland Park West, Balcones & Mount Bonnell April 7, 2011

(Area defined by: North of 35^th St., West of MoPac, East of Lake Austin & South of 2222)

- There are currently 26 luxury homes available in this area with 7 others currently under contract. Over the last 3 months 8 luxury homes have sold. At this rate of absorption there is 10 months worth of inventory. Things were somewhat active last fall in 1B north and activity increased during the holidays and early in the year. Since that time the pace has slowed. However, 7 pending homes is a healthy sign and shows a rate of increasing activity, and I anticipate this higher activity to continue.

The activity in the $500k to $999k range accounts for almost 90% of the areas luxury sales, this is higher than normal. There are currently 13 homes available but only 2 of the 7 pending homes is in this price range. Over the last 3 months 7 homes have sold between $500k and $999k. With this rate of absorption there is 5.6 months of inventory, which is significantly better than the ULRA luxury market.

The activity in the ULTRA luxury market, $999 and up, has been very slow over the past three months but we have seen much more activity recently (5 pending homes is a strong indicator). There are currently 14 active homes available and 5 pending sales in this market. Over the last 3 months 1 ULTRA home has sold yielding an absorption rate of .33 homes a month. At this rate there is currently 42 months of inventory. We have seen these buyers start to enter the market because jumbo rates have been so attractive and all signs point to a stronger real estate market. The very negative absorption rate is more of a statistical number, and doesn’t accurately show market forces. 5 pending sales shows strong buyer activity in this market and once these close the absorption rate will be much more favorable.

Final Thoughts: The activity below $1 million has been solid and accounts for almost 90% of the sales. The ULTRA market has been very slow until recently. Luxury sellers have held firm on their pricing and this indicates a stronger market (last fall much of the luxury market was discounting their homes to find real buyers). The market data is somewhat skewed because of the high number of pending sales that have yet to close. As those homes close the numbers will be much more favorable, but I will be interested to see if 1B can keep up this pace. My though is activity in the $500 to $999 range will increase and the $1 million + activity will stay solid but slow some in the next months.

Best,

Marcus

More good news for Austin?

Hey Guys,

More good news for Austin, as PayPal considers adding 1000 new jobs in the Austin area. This is another example of Texas', and to a greater extent, Austin's popularity among businesses and individuals alike. Low taxes, no state income tax, a healthy job & real estate market, a highly educated populous and fabulous weather makes Austin a great choice. Take a look at the Austin Business Journal article for more information: PayPal

Have a great day!!!

Best,

Marcus

New real estate lifestyle site... workingtoomuch.com!!!!

Hey All!

I am happy to announce that I launched a new real estate website geared for second homes, ranches and legacy properties. I would love to hear your thoughts, and of course, if you're looking for a second home, beach house or ranch call me; I would love to help.

www.workingtomuch.com

Thanks and have a great night!

Best,

Marcus

Homes sales volume, median price consistent from year-to-year in February

Austin Board of REALTORS® releases February 2011 real estate statistics

AUSTIN, Texas – March 21, 2011 – According to the Multiple Listing Service (MLS) report released today by the Austin Board of REALTORS®, 1,112 single-family homes were sold in the Austin area in February 2011, a figure that is statistically unchanged from February 2010.

In the same time period, the median price for single-family homes in Austin was $193,000, up two percent from February 2010, and homes spent an average of 98 days on the market, 27 percent longer than February 2010. In addition, new listings were down 24 percent in February 2011 compared to February 2010 and active listings were down eight percent.

“In terms of home sales volume, February 2011 looks much like this month last year. However, there are a few key differences,” said Judith Bundschuh, Chairman of the Austin Board of REALTORS®.

Chairman Bundschuh continued, “Fewer homes were on or entering the market in February. This could mean buyers may encounter more competition for properties heading into the summer selling season. At the same time, increases in the days on market means sellers should prepare to be patient if they want to earn full value for their properties.”

In February 2011, pending sales for single-family homes were down 11 percent when compared to February 2010. Chairman Bundschuh explained, “The market is still feeling the effects of the home-buyer tax credits. As we compare last year when incentives were available to this year without the tax credits, we see that month-to-month comparisons are still being influenced by the artificial stimulus the tax credits provided.”

Additionally, leasing activity in the Austin area increased in February with 1,117 properties leased, up five percent from the same month last year. The median lease price in February 2011 was $1,200, nine percent more than in February 2010.