The 2006 Austin real estate statistics are out, courtesy of the Austin Board of REALTORS® (ABoR).  Basically, the year was strong, with many MLS Areas seeing some pretty hot rates of appreciation.  Residential real estate in the Austin area as a whole was strong, with just under 27,000 single-family homes being sold.  This number is lower than all activity as many custom homes are often not in the MLS.  This is also true of some of the large, production builders.  Having said that, the numbers do tell a story.

The 26,958 single-family homes sold represent a 10% increase over 2005.  The average price was up 10% over 2005 to $235,738.  It is also worth mentioning that the sale of townhomes and condominiums rose 29% to 3,049 units.  The sale of lots was also way up with 3,580 sold.  This was an increase of 32% over 2005. 

So what about prices?  The median price of a single-family home sold in the Austin area was up 6% to $174,500.  In order for the rest of this post to make sense, it will be helpful for readers to see an Austin MLS Area map.  The appreciation rate of 6% sounds quite healthy.  It isn't too high and it is certainly better than it has been compared to the previous 4 years.  However, to better understand what went on in 2006, you need to get MLS Area specific.  The list that follows will show the MLS Area, then the 2005 median price, the 2006 median price and the percent change.  Here goes:

Area20052006Appreciation
5 $108,600  $135,000 24%
HS $128,800  $158,750 23%
WW $100,000  $122,500 23%
4 $227,000  $275,250 21%
6 $249,900  $295,000 18%
1B $378,500  $440,000 16%
2 $187,800  $218,000 16%
8W $408,000  $467,500 15%
7 $292,500  $335,000 15%
LN $222,930  $255,000 14%
SW $213,000  $242,000 14%
1A $369,920  $420,000 14%
HD $269,970  $306,540 14%
3E $  92,000  $103,900 13%
LH $183,800  $205,750 12%
RN $387,940  $429,500 11%
10 $134,000  $148,000 10%
3 $142,000  $155,000 9%
8E $550,000  $600,000 9%
PF $137,250  $149,600 9%
SE $  97,690  $106,000 9%
HW $175,000  $189,180 8%
JA $164,000  $177,250 8%
SE $101,940  $110,000 8%
1N $227,500  $245,000 8%
2N $120,000  $129,000 8%
LS $312,000  $335,000 7%
NW $180,000  $193,000 7%
CL $145,200  $155,110 7%
W $311,000  $331,250 7%
BA $119,900  $127,560 6%
SV $110,000  $117,000 6%
RR $160,000  $170,000 6%
SC $154,400  $163,660 6%
11 $  95,000  $  99,900 5%
9 $136,250  $143,000 5%
CC $100,000  $104,860 5%
HH $136,500  $143,000 5%
HU $129,930  $134,990 4%
GT $165,000  $170,950 4%
MA $125,570  $130,010 4%
N $164,900  $170,100 3%
NE $137,500  $140,000 2%
WE $  76,200  $  77,000 1%
TC $  94,220  $  93,500 -1%
BW $120,650  $117,000 -3%
EL $111,840  $105,000 -6%

If you know your Austin geography, much of this may make sense to you.  If you don't, let me give you some hints as to why real estate prices did as they did last year.  Keep in mind that I said prices, not appreciation.  That will be addressed later.  Areas close to downtown are more expensive just because of where they are.  This would include MLS Areas 1B, 6 and 7.  Why not e and 5?  Areas of Austin west of Interstate 35 have historically carried a higher value.

If you go west and a bit northwest, you get into the Hill Country and lake area.  Areas 1A and 1B are in the hills.  Area 1B is also close to downtown and the University of Texas.  Just west to Areas 8E, 8W and RN take you into some very dramatic Hill Country.  There are homes with amazing views and others with lake frontage.  Many homes are custom homes, making them more expensive in general.  Some sit on acreage, which also adds to the price.

Take a look also at LS, W and HD.  LS will include waterfront properties on the southern side of Lake Travis.  All three area also have quite a few homes with great views and also homes sitting on acreage.  These are also areas in which there are quite a few golf course homes and gated subdivisions.

To appreciate why rates of appreciation were high in some areas and low in others, you've got to consider several things.  Area 5, with the highest rate of appreciation, got a boost because of investors.  This is an area where investors realized they could get in low, fix and flip for a profit.  It also has a lot to do with the proximity to downtown.  Even an area that historically has been somewhat run down, the location alone made it attractive.

Areas 1B, 4, 6 and 2 appreciated also because of location.  The new homes that have gone in have carried a high price tag and many other homes were updated or adding on to.  Some homes in these areas were even taken off the lots and moved to places like Apache Shores, which is in the LS Area.  The new homes that replaced the ones that were moved sold for relatively high prices.

At the other end of the spectrum you have HH, HU, WE, TC, EW and EL.  These are areas in which there has been huge pressure on the resale market by new homes built by production builders.  New home starts were way up last year with many being in these areas.  With new homes selling relatively inexpensively, older homes didn't stand much of a chance to compete well without going for a low price.