Austin American-Statesman, Tuesday, May 22, 2012
The Central Texas housing market has turned in sellers’ favor, with homes going to the swift, multiple offers making a comeback and prices creeping higher, local real estate agents and housing experts say.
Activity continued on an upward trend in April, with home sales increasing for the 11th straight month, the Board of Realtors said Monday.
Sales in the five-county region jumped 16 percent compared with April 2011, with 1,949 homes sold, the board said. And the median sale price saw another “considerable increase,” rising about 9 percent to $212,000, said Leonard Guerrero, chairman of the board.
Meanwhile, the supply of homes for prospective buyers continued to shrink, with 24 percent fewer homes on the market in April compared with April 2011, the board said.
The dwindling inventory is coming at a time of rising demand, making for the tightest supply that housing expert Mark Sprague said he has seen in more than 30 years tracking the region’s market.
“The market has definitely turned the corner,” Sprague said at a recent housing market forecast event in Austin. “The house or apartment you look at today won’t be there tomorrow.”
Tim Ellis, the real estate analyst for Redfin, a national real estate brokerage based in Seattle that recently opened a local office and tracks housing data in several Central Texas counties, said that “it’s no longer a buyer’s market” in Austin.
“There’s a really tight supply of housing for the demand there is,” Ellis said.
The low inventory — the board said Austin had about a 4.4-month supply last month, 2.3 months less than last April — is at the root of the region’s “bidding war epidemic,” said Rachel Musiker, a spokeswoman for Redfin.
Experts consider a 6 1/2-month supply a balanced market, and prices typically rise when the supply of houses falls below six months.
The region’s job and population growth, along with low unemployment — the jobless rate fell to 5.5 percent in April, the lowest since late 2008 — are helping fuel demand for housing, along with historically low mortgage interest rates, experts say.
“It’s nuts out there,” said Cyndy Stewart, the lead agent for Redfin in Austin. Of the 25 or so offers she has written in the past six weeks, almost all have been multiple offer situations, Stewart said.
“There are typically three to four offers” ahead of us,” Stewart said. “We’re literally waiting our turn in line. And now we’re seeing prices creep up. We’re having to compete above list price, and sometimes we’re not winning those deals.”
Robin Curle, a real estate agent with JB Goodwin in Austin, said the market is being driven by people upgrading to more expensive homes and by newcomers moving to town for work.
“Properties that have been sitting are now selling, and the ones that are newly on the market are selling sometimes in days,” Curle said. “People are buying fast, and we’re seeing multiple offers.”
A Steiner Ranch house priced at $515,000 sold in four days, before Curle even listed it in the Central Texas database of homes for sale.
“Prices have corrected and have been flat, and now they’re starting to increase,” Curle said. “Buyers feel like they better act now while they can get prices at the bottom of the market.
” Claire and Dave Seeger’s home-selling experience this month is a sign of the changing market.
The real estate agent for the couple, who will be moving to Houston for Dave Seeger’s new job, posted the online listing for their five-bedroom home in Northwest Austin at 2:30 a.m. on a recent weekday. That same day, there were 11 showings, with the first offer received just after 2 p.m., said Claire Seeger, who works for a local software firm.
“Then we got a second offer that day, and a third offer the next day, and people continued to look at it,” she said. Two other people wanted to make offers, but Claire Seeger said their agent told them it probably wasn’t worth their time.
The Seegers countered the original offer. The buyers agreed to pay higher than the $279,000 asking price for the 3,062-square-foot home, which has a pool, remodeled kitchen and bathrooms and sits on a three-quarter-acre lot amid 30 oak and pecan trees.
Claire Seeger said she “absolutely” was surprised with the response.
“We love our house, and I guess a lot of other people love or like it too, given the interest in it,” she said.
Of the major markets Redfin surveys, Austin recently tied with Washington for the area with the largest percentage of homes selling in three days or fewer — about 1 in 4 — among homes sold from January through mid-April.
April’s overall housing numbers “suggest the recovery in Austin’s housing market continues to gain steam, said D’Ann Petersen, a business economist with the Federal Reserve Bank of Dallas who tracks the local housing market.
“Both existing home sales and pending home sales were up strongly compared to a year earlier, suggesting strong demand,” Petersen said. “Declining inventories also reflect the pickup in housing demand and should lead to price gains in areas with the tightest supply.”
Austin’s economy is outperforming the statewide average, with Texas being one of the best-performing states nationwide in job growth, Petersen said.
Redfin’s Ellis said the Austin area can expect it to be a seller’s market for the next few years. He thinks prices won’t shoot up dramatically, but rather will “more or less” track inflation, rising in the 3 to 5 percent range.
“As more potential sellers see how the market is heating up,” Ellis said, “more are going to decide to start listing their homes, and that will alleviate some of the built-up pressure we’re seeing right now.”