Austin Home Buyers – So You Want a Deal Part II?
For this, we will need to talk some statistics. 2006 was a record setting year for Austin home sales. Things started slowing in 2007 and 2008 and sales hit the skids in 2009. As one might expect, prices have come down, but believe it or not, the Austin area is still in line with 2006 prices. Not many cities can make that statement.
Let’s now break things down in different price points. The figures I will use will be the sales of single-family homes from the beginning of each year through yesterday. The first group of homes will be those that sold for less than $249,000. In 2006, 10,586 homes sold and the average sold price was $153,552. For 2010, those numbers were 6939 and $159,387. So even though the number of homes sold this year was down by over 50%, the price actually went up.
From $250,000 to $499,999 there were 3328 homes sold in 2006 and the average sold price was $337,999. In 2010, those numbers were 2796 and $337,930. Statistically, there was no movement in price.
From $500,000 to $749,999 there were 584 homes sold in 2006 and the average sold price was $600,628. In 2010, those numbers were 480 and $597,000.
From $750,000 to $999,999 there were 198 homes sold in 2006 and the average sold price was $847,705. In 2010, those numbers were 141 and $849,932.
From $750,000 to $999,999 there were 122 homes sold in 2006 and the average sold price was $1,559,654. In 2010, those numbers were 177 and $1,566,039.
So why compare 2010 to 2006? To show that we didn’t see a plunge in prices like many other markets have seen. Sure, the number of homes sold is down, but Austin’s numbers are still looking relatively good compared to other markets.
Back to great deals for a minute. People selling now who bought 4-7 years ago may have some equity in the homes from down payments, but many also got the little down loans. So there may not be much motivation for a significant price drop. This is true at all price points.
Looking at why people are selling, some are selling to move up or down. Some are relocating out of the area. Some more are selling for other reasons that don’t involve a time line.
Many sellers who are not in distressed situations do not have the motivation to come down on price dramatically. The price range I have seen this more is in the $750,000 and up range. Many sellers in this price range understand that there is way too much inventory on the market compared to the number of buyers out there. Some of these sellers have enough money to sell for less than they want because they are downsizing. They don’t like taking a hit, but many will do it just to unload the house.
Having said that, many sellers in the higher price points don’t need to sell so they are either hanging on for a higher price or are dropping prices minimally.
People selling now who bought in more recent years are frequently under water. In other words, they owe more than the current market value of the property. Many of these people will not come down on price.
So where are the deals that everyone wants? I’d like to your thoughts on that. Feel free to leave a comment and let me know what you think
