Austin’s home market in October 2010 – Don’t jump off the 360 bridge (yet)!
My favorite mortgage banker has a saying: “If it doesn’t bleed, it doesn’t lead.” This line always makes me chuckle at first, particularly because I love to poke fun at newspapers and the news stories that they use to sell papers. When Austin’s market is neutral/flat, our local paper has been particularly guilty of reprinting gruesome real estate stories from around the country, with only 8-point font disclosure of where the reprint is from at the end of the article.
Today, they don’t have to reprint from Sacramento! Our October stats have been compiled and formatted by the Austin Board of Realtors and released to the world. For some reason, this process takes 19 days every month, but that is a different gripe altogether. Unit sales are down 31 percent from October of last year.
I have to take much caution in my explanations of market stats so that I don’t appear to be a cheerleader. While the news uses doom to sell papers or to get us to tune in at 10 to learn what we may be poisoning ourselves with, realtors are notorious for the opposite strategy of cheering the good news as they (I myself included) make our livings selling houses. Why do I not want to appear as a cheerleader? Credibility. My clients appreciate an educated look at the market, “reality,” if you will. I find that I sell more houses when buyers know the facts of the market; in turn, they tend to hold off when they are unable to sort thought the massive amount of seemingly conflicting doom and the cheers.
So, with that being said, let me not say that I have cheerful news but that, at least, confidently tell you that there is no need to jump off the 360 bridge. Take a look at this chart used in this morning’s newspaper article. The chart on the right tells the whole story. Last October and November were huge months for unit sales. We thought that the federal buyer’s tax credit was going to run through the end of November. These are significantly “boosted” months last year that are used for the year-over-year comparison–November even more so than October. Prepare yourself for the headline on December 19, 2010 – “AUSTIN HOME SALES DOWN 47%.” It’s going to scare a lot of people, but you will know why. Last November was a huge month.
The takeaway is that you can see on this same chart that December of last year fell back to being a normal month. We will probably see headlines on January 19, 2011, like “AUSTIN HOME SALES UP 3%”; or just maybe it’ll be back to something like “VALUES PLUMMET IN NEIGHBORHOODS WITHIN 5 MILES OF THE ZOO,” Sacramento Zoo, that is!
Sellers who make their negotiating decisions based upon the temperature of the sentiment in the mainstream media should be at their softest between now and January 19, 2011. Good luck and have fun!
Goodwin Partners, Inc.
11149 Research Blvd. #100
Austin, TX 78759
(512) 346-4873 fax