In
my last post (see
Updated
Austin Market Dashboard, 04/29/11) I focused largely
on volatility in unit sales, but emphasized that the Austin/Central
Texas real estate market has largely maintained a healthy balance
between supply (i.e., listing inventory) and demand (i.e., home sales),
which allowed our home values to remain much stronger than many areas
over the past four years. This post is intended to highlight that
price stability -- and growth.
There is no doubt that Central Texas sale volume is down compared to
the pre-recession market:
In that look at monthly sales, even though the trend has clearly been
downward, typical seasonality was evident in 2005, 2006, 2007, and
2008. Sales in 2009 were distorted by a second
tax incentive that was scheduled to end mid-year, but that was extended
through September because of concerns that many builders were having
difficulty completing contracted homes within the program
deadline. Then in 2010, home sales peaked much earlier than in a
"normal" year, with a third homebuyer tax credit program that ended
June 30. March 2011 showed encouraging strength, without external
stimulus.
Using the 12-month rolling average of those sales filters out
seasonality and
most of
the effects of the tax incentives:
This chart of the moving average still includes a bulge in mid-2010
because of the combined effects of the homebuyer tax credits that
expired in November 2009 tax credit and June 2010. Still, the
trend is obvious, with 2010 running about 30% below sales volumes in
much of 2006 and early 2007.
Now, back to the remarkable resilience of home values in the Austin
area:
Notice that homebuyer tax incentives more effectively accelerated
sales of lower priced homes and the last two incentive programs ended
within 7 months of one another, producing a dip in the rolling average
sale price. Even with that effect, though, the price trend
through the recession and housing downturn was basically flat.
Moreover,
the
12-month average price reached a new all-time high in
March 2011!
I remain convinced that past performance and future indicators support
real optimism for Austin and Central Texas residential real estate.
