Year on Year Foreclosures up 27% and Home Sales down 15% (Austin: real estate market, condo)

[orbius]

Foreclosures:

August foreclosure rate increases in Austin - News 8

Home sales for the entire year are up 2% over 2009 however sales started a strong downward trend in August down 15% from August 2009:

Realtors: Austin home sales down 15% in Aug. - Austin Business Journal

If you're thinking of buying a house these numbers are something to keep in mind. I really dont know what advice to give people. Do you buy in areas getting hammered with foreclosures hoping you get a lower price. Do you buy in areas that are not suffering many foreclosures thinking they will not suffer a knockdown effect from areas suffering large price drops? Me personally I would probably sit out a year or two until the bleeding(foreclosures) normalizes. Thats not what any realtor wants me to say but I'm entitled to my opinion.

I think a site like realty-trac that lets people look at foreclosures, city by city, neighborhood by neighborhood is invaluable since Texas releases almost no data about pricing, etc.

[austin-steve]

Here are some additional stats. Let's go dig up some old posts from 2008 when people here on CD were saying the market was going to tank 15-30%. Didn't happen. Average/median sold prices now exceed the peak in 2007. This is somewhat misleading because it's caused by higher sales volume (by percentage of total sales) of higher end homes, but the increase in higher end home sales tells us something as well, that buyers are viewing homes at $500K and up as good deals.




Below is a running month-by-month chart of the last 30 months showing the monthly ups and downs in average prices. The Austin market has bounced up and down within a fairly static band for over two years, and now appears to be trying to break out. Time will tell.



Here's the kicker though, sales volume is way off because of the buyer tax credit hangover. Notice the green line below. These are Written/Pending sales, not closed sales. Look what government interference did to the market.



Nevertheless, if the green line can level off and remain at or above 1,000 by end of year, the reset button will have been substantially set for a strong 2012, provided the economy gains more traction nationally (so people who want to move here can sell their homes elsewhere) and Austin job growth continues.


Steve

[ROY DUBOSE]

saw an artcle on msn from a 97 yr old broker in the northwest -- his advice in a sound bite was if you can buy do, if you don't hafta sell don't

[trayanh]

what I don't like is, most foreclosure homes are very old ones, typically built earlier than 2005.

[orbius]

First frankly I dont see what average selling price means other than affirming the statistic that the high end which had been seemingly immune to foreclosures started to get hammered with foreclosures.

Also from a pure numbers statistic the fact that foreclosures were up 27% and yet sales were down 15% in a month is a highly worrying number if it becomes a trend.

You have a large amount of extra inventory on the market from the foreclosures yet less property is selling.

To me the trends right now indicate a worsening real estate market but a lot of people are promising that things are going to get rosier towards the end of the year.

I guess stay tuned no one knows 100% is the message. Though the August data is relevant factual data that all interested parties should examine.

[atxcio]

If you need a home for your family for the next 5 years, you buy now and take advantage of motivated sellers and low interest rates.

If you are an investor, you wait it out unless you can cherry-pick something at a bargain basement price. Having watched Austin RE for about 20 years, I've seen bargain basement prices... right now we aren't even close. If we were, I'd probably go buy something.

Interesting thing about sub-markets, though:
Downtown condo market defies the downturn

The downtown condo fire sale hasn't materialized as I had hoped. The Sabine condo auction looked promising, but the problems with the common areas/elevators and associated lawsuit (plus very, very close proximity to 6th street) kinda turns me off. I don't know, maybe just wait a little longer...

[austin-steve]

Also from a pure numbers statistic the fact that foreclosures were up 27% and yet sales were down 15% in a month is a highly worrying number if it becomes a trend.

Describe why these numbers are worrisome to you?

And, 27% of what? Foreclosures are a small sample size compared to the entire market in Austin. In some parts of the country, foreclosures are well over 50% of all sales. Not even close in Austin.

Like I said, go dig up some posts from 2008 and save yourself the time of retyping what people were saying back then about the doomed market, under even gloomier scenarios than now.

I'm not saying it's all puppy dogs and butterflies - 56% of all listings departed the MLS as failed sales efforts in August. This means there are still not enough buyers to absorb all inventory, and sellers are remaining stubborn on price, refusing to capitulate on price and instead saying "no thanks" to lower offers.

Steve

[jobert]

The best thing to do is take advantage of what you can do.. We have an appraiser coming by later in the week as we are in the process of re-financing into a 15-year mortgage. In times like these, you have to make lemonade, or else you risk coming out the other side with nothing to show for it. Seize the opportunity.

[trayanh]

true. a friend of mine rented a house in one of the most suffered cities. all his neighbours' homes went foreclosure.

Originally Posted by austin-steve

Describe why these numbers are worrisome to you?

And, 27% of what? Foreclosures are a small sample size compared to the entire market in Austin. In some parts of the country, foreclosures are well over 50% of all sales. Not even close in Austin.

Like I said, go dig up some posts from 2008 and save yourself the time of retyping what people were saying back then about the doomed market, under even gloomier scenarios than now.

I'm not saying it's all puppy dogs and butterflies - 56% of all listings departed the MLS as failed sales efforts in August. This means there are still not enough buyers to absorb all inventory, and sellers are remaining stubborn on price, refusing to capitulate on price and instead saying "no thanks" to lower offers.

Steve

[austinnerd]

Originally Posted by orbius

Also from a pure numbers statistic the fact that foreclosures were up 27% and yet sales were down 15% in a month is a highly worrying number if it becomes a trend.

So let's talk numbers. August foreclosures were up 27%, however, you forgot to mention that July foreclosures were actually down 21% from a year ago. Given that, I'd say doing any kind of trend analysis is simply guessing at this point. And while sales are down 15% YOY, sales are actually up 2% for the year compared to last year at this time. A large chunk of both numbers can probably be attributed to the expiration of the tax incentives. So again, what can one discern based on these numbers? To me the numbers say that the market is a bit skittish, responding to external influences but overall appears to be relatively flat at worse. Until we start seeing worsening conditions for several months straight, I think raising a warning flag is extremely premature based purely on those numbers.