https://www.youtube.com/embed/Iea8yIuaxtI

Hello everybody,

Q3 market update here including a condensed video format version!

For the most part Q3 has performed as expected and predicted with a few exceptions. Prices moved up a few percent bringing year-to-date appreciation to around 6%. Tier-1 homes (priced right, no major flaws and wow factor) sold within days with multiple offers and average of 3-5% over list price.  Tier-2 properties (mostly a Tier-1 but with one flaw such as needing cosmetic updates) averaged 40-60 days on the market and about 3-5 % negotiability. Tier-3 (major issues or work) sat on the market 90+ days and 10% negotiability.

Currently:

Averaged across all price bands/sectors, market supply is at 2.8 months which is considered a very low inventory/ high appreciating environment. For context, a 6-month supply (enough inventory to meet current rate of demand 6 months out) is an equilibrium market.

  • $0-$500k We are at 2 months or less, severely undersupplied and on pace to see 7-8% appreciation this year
  • $500k-$1M We’re at about a 5-month supply. Up a few months from Q2. I’m projecting 6% for the year
  • $1m-$2m We’re at a 9-month supply, also up a few months from Q2. I’m projecting 4-5% appreciation for the year, tending down a bit compared to what I thought we’d see (6%)
  • $2m+ Has remained undersupplied (as long as it’s highly relevant to today’s cleaner lines and transitional aesthetics), otherwise it’s sitting. I’m projecting 6% appreciation here

Significant factors in the market:

The main factors leading to the current market environment:

  • Job growth – Austin’s economy on pace to add 40k net jobs for 2019, good for #12 in the country. Very strong and creates a lot of demand for housing
  • Unemployment – At an incredibly low rate of 2.7% -basically full employment. Top 3 in the country. Creates a lot of confidence in the market
  • Interest rates have crept down even further in Q3, further boosting activity
  • Lifestyle – The population growth isn’t all due to job growth. Austin officially has become a lifestyle city which is certainly having an impact on real estate.  #1 Fastest Growing Metro Population & Top 10 Foodie City per Wallet Hub as well as in Top 10 leading percentage of Creative Class in the US per CityLab

Looking Ahead:

I see 2019 ending with 6-7% appreciation in values, down a bit from what I predicted last quarter but still solid. And I stand by 2019 still being the pivot year for appreciation over the next few years compared to 2017 and 2018.

4th Q will remain busy for Tier-1 properties, but I do see Tier-2 and Tier-3 properties taking longer and needing to negotiate further to sell – there will be opportunity buys there.

Core sectors up to $1.5M and above $2M will remain busy in central. Within city limits but not central or suburbs. I expect it’ll stay robust activity and demand up to $1M. In the suburbs, up to $700k will stay active.

I hope this provided valuable insight as our goal is to provide irreplaceable value, always! For more regular updates between each quarter sign up on our email list via our website and follow us via our social media handles found below. And as always, we’re happy to discuss what’s happening in your sector of town so don’t hesitate to reach out.  FacebookLinkedInInstagram