With stats finally in from Q2 2016 lets dive in for both my take and a nice tally of articles below.
Following up on my last market update, I’m holding firm to what I’ve been sharing: I believe this is the peak year in an up-cycle that has been very robust since 2011. No doomsday here, just a temporary adjustment for a few years that is likely to happen.
Average household income (at $72K currently) is up 8% since 2010, and yet home prices per the visual below have moved up average of 40% during same period. It is normal to have a delta but a 32% delta between price-to-income ratio is too large. This gap will close given the continued growth/jobs Austin will experience and therefore not a long-term issue, but within the current cycle it’s causing us to peak out .
Based on above + the following points I believe we will see and average of 10% pullback in pricing over the next few years across the market. In 2020 that 10% loss will get recaptured and move beyond as the next cycle starts.
Supply of housing in a balanced market is 6-6.5 mths, an equilibrium market between Buyers and Sellers.
Supply above $1M is at 11+ mths compared to 8.5 mths a year ago, it’s oversupplied.
Supply between $500k-$1M is at 8 mths compared to 5 mths a year ago, starting to get oversupplied.
Supply between 0-$500k is at 3 mths compared to 2 mths a year ago, holding strongly. However, as the other bands are peaking, this price range will follow in 6 mths in my opinion.
We’re innovative and strategic real estate agents and advisors with an entrepreneurial spirit, who are well-versed in the Austin realty scene and residential real estate. We understand that the life of an entrepreneur can be very busy, and when it’s time to buy a house or purchase an investment property, you don’t have the time oversee every step of the process. We’ve built a formula for simplifying real estate and investing by utilizing our in-depth and up-to-date knowledge of the Austin real estate market, our skills as real estate investors and advisors and our local connections. We have a growing portfolio of homes for sale to help match you with the perfect property.