Real estate market activity remains volatile and unpredictable,
nationally and in Austin. Over the past week I have commented on
significant month-to-month changes in average home prices (see Home prices decline, but ... and Case-Shiller caution -- national index, local business).
I have also noted that monthly unit sales have declined in recent
months. In an effort to bring these discussions together, I have
assembled several charts that I hope are helpful.
First, the number of homes sold has been down for four
consecutive months from this year's May-June peak, and from year-ago
levels (click image to enlarge.):
It is worth noting that both of those peaks were "non-seasonal,"
influenced by two homebuyer tax credit programs that expired in
November 2009 and June 2010, respectively. Nonetheless, the
slow-down was very apparent in the 2nd half of 2010. (Buyer
interest has accelerated in many areas in late October and in
November. Final November data will be available just before
Christmas, so we'll know the real results then.)
At the same time, notice the effect of those tax credit programs on
average sale prices:
That chart is not an
indication of a general decline in prices, but instead shows a change
in the distribution of sales among various price ranges. The tax
credit programs motivated buyers of lower priced homes much more than
buyers at the upper end of the market, so after the expiration of each
of those tax credit programs sales of lower priced homes dropped off
and upper end sales drove market averages upward.
Combining those volume and price effects, here is a look at the total
dollar volume of home sales:
Obviously, that's still not a pretty picture for July through October
2010, but changing to a year-to-date view offers a somewhat different
outlook:
Now, it's clear that 2009 and 2010 have both been weaker than 2008, at
the beginning of the recession but note, too, that for three quarters
of 2010 YTD unit sales were equal to or higher than the same time one
year earlier. Again, note that sales in October and November 2009
were influenced by a tax credit for homebuyers who closed by the end of
November. In 2010, on the other hand, November sales dipped more
like a "normal" year, so cumulative sales for the year were below 2009
for the first time.
Finally, accumulating monthly dollar volume, here is a YTD view:
In this view you can see that the total value of homes sold in the
first ten months of 2010 remains higher than 2009. You can also
see the gap narrowing as the effects of the last tax credit program
fall further into the past, and this year's comparison to the November
2009 tax credit is more pronounced.
Again, this year's real estate market remains volatile and
unpredictable, but if we filter out some out of the ordinary market
influences from the past couple of years, 2010 doesn't nearly as dire
as some news reports make it sound. Most analysts expect a slow
recovery in the U.S. market in 2011, and many reports predict the
Austin/Central Texas area to lead. Only time will tell, but even
in a difficult time we're more than holding our own.
Rainer
129,754
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RE/MAX Capital City13018 Research BlvdAustin,TX78750
local_phone(512) 785-3345
business(888) 600-6939
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