Austin Realtor Survey Confirms Austin Home Prices Going Down

This newly released Credit Suisse Realtor Survey for major markets, including Austin, and the Austin MLS August sales statistics confirm that the Austin real estate market faces falling prices in the near future. Counting the first half of the year, Austin real estate average and median home prices look like they are holding up ok.  But the Credit Suisse builder stats clearly indicate future price declines, echoed by anecdotal Realtor sentiment.  As shown in our analysis of the Austin MLS statistics for August, all of the 3rd quarter MLS stats are 15-20% below 2009 and all commonly accepted leading price indicators – sales volume down, pending sales down, listings up – point to downward price pressure.  The Credit Suisse report confirms what the August MLS statistics indicated:  Austin home sellers are facing downward price pressure.   

Report from Credit Suisse on Austin:

Austin, TX – “Weak Economy” Weighing on Buyers; Decisions Postponed
(6,669 single-family permits in 2009, 5th largest market in the country)

Buyer traffic remains depressed. Our buyer traffic index continued to show traffic well below agents’ expectations, as our index came in at 13, unchanged from the very weak readings in August, with readings below 50 pointing to traffic below expectations. Agents’ commentary was centered on buyers’ nervous approach to the market. Agents consistently mentioned that buyers lack confidence and are not sure about the “stability of the market.” Another stressed that “Buyers worry about their future. They think buying a home is too much of a risk.” There was also a lack of excitement in the market, as one
agent noted that buyers were “jaded and unenthusiastic” about buying. This continues the theme from the summer, when buyers also had little urgency to enter the market.

Prices fall further as inventory levels create added pressure. Prices continued to fall in September, as our home price index came in at 24 (from 16 in August), suggesting lower prices over the last 30 days (readings below 50). This marks the fifth consecutive month when agents noted lower prices in Austin. We expect prices to remain weak, as inventory levels trended higher in September. Our home listings index fell to 5 in September from an already weak 13 in August, with anything below 50 pointing to rising inventory. Meanwhile, our time to sell index remained at very low levels, as it came in at 11 (from 8 in August), suggesting an increased time to sell (readings below 50 point to an increased time to sell). We think additional price declines will follow.

Comments from real estate agents in the report:
■ “Prices keep falling. Nobody wants to buy in this environment.”
■ “People have pre-election jitters. They want more clarity before they buy.”

View the full Austin Credit Suisse Realtor Survey 10-05-2010 for some cool charts and graphs on cooling Austin realtor and builder sentiment.  

Is the sky falling on Austin home prices? 

Probably not.  We’re just getting our ceiling lowered.  Or taking a hair cut. The year to date Austin market statistics are deceptive, as they include artificially inflated sales numbers.  Who cares where prices were at the beginning of the year, anyway.  Today’s prices are what matters, and there is a dramatic statistical difference between the two.  Austin home prices will be lower in the 4th quarter than they were in the 1st.  The averages make it look even, but that’s not going to change the fact that we’ll be in the best buyer’s market in at least a decade.  We’ll back that up when the September Austin MLS statistics come out.  Until then, Austin home sellers will keep wishing it was spring again and Austin home buyers can’t wait for winter to come.  

Bob Roberts with Gracy Title and the kind folks at Credit Suisse were kind enough to provide their survey results.  Please consider Gracy Title for your next transaction or Click Here for Gracy TOOLS.

Scott Turner, broker/builder
www.turnerresidential.com
www.riversidehomesaustin.com
scott@turnerresidential.com
o 512.473.9930
f  512.473.9933
c 512.751.5358

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