Austin Real Estate Market Cycles, 2003-2009
Do you wonder what the typical cycle of business activity in Austin real estate looks like? The graph below, published by the Austin Board of Realtors® in a February 2009 report, shows that listing and sales activity follows a pretty repeatable pattern every year. What varies the most is the height and depth of the cycles. (Based on information from the Austin Board of REALTORS® for the period 1.1.03 through 2.28.09.)
The Austin Real Estate Cycle: New listings historically reach their low in January following the holiday season. Closed sales follow this trend, though about a month behind the new listings. The volumes of new listings, pending sales and closed sales then begin to rise and reach their peak in the middle of the summer. They drop off again as the year heads into the fall months and bottom out once again.
Austin Real Estate Market History: As can be seen, the strongest Austin real estate markets in recent years occurred in 2006-2007. Sales numbers were the highest in 2006 and prices were still appreciating well. As sales began to slow in 2007, appreciation slowed also. Since that time, prices have pretty well stabilized in the Austin area. Sales have continued to drop, significantly in some areas and neighborhoods. Total sales in January and February of 2009 are close to the level they were at in early 2004.
Effect on Austin Home Sellers: Some sellers anticipate the spring and summer selling season by putting their homes on the market just in advance of this time. When demand for homes is up, conditions typically favor sellers. Other sellers may want less competition from other listings and try to sell at times when there are fewer properties on the market. Of course, some sellers may have little or no option on when to list their homes for sale because of job transfers, job losses, or other circumstances. The key thing in any market is setting the list price correctly because the right price may be the thing that makes a home appealing to a prospective buyer.
What about People who want to Buy an Austin Area Home? It is in the spring and summer months, when the Austin real estate market is its strongest, that more buyers look for new homes. The current market (April 2009) finds sellers (owners and builders) adjusting their expectations of what their properties will bring. Why? Homes are selling more slowly and buyers are looking for bargains. How? By reducing prices and offering incentives to lure potential buyers. Buyers may discover that they have the upper hand in negotiations, especially if sellers are in the position of needing to close the sale of their homes.
When to Sell or Buy an Austin Home? Is it a good time to sell? That depends on the need and motivation of the seller. If you can wait, a better time to sell may lie ahead. Is it a good time to buy a home? With low interest rates, lots of homes on the market and the downward pressure on prices, it may be. If you are a first-time buyer and close on a home before December 1, 2009, you may be able to take advantage of an $8,000 federal tax credit.
If you are considering buying or selling a home in the Austin area, I would like to assist you. You can reach me at (512) 913-1557. 
Jim Gilbert, REALTOR, Heart of Austin Homes. Licensed (#0536692) to sell real estate in the State of Texas.
