We hope you’re doing well and staying safe. We received the full April 2020 market statistics from Independence Title on Wednesday, so wanted to send these out to everyone, along with our comments and interpretations.
Since local businesses are affected heavily by the COVID-19 crisis, we want to highlight a local business owner when we send these newsletters. This week, Merry Maids of West Austin asked if we would let everyone know that they are offering $50 off an initial deep cleaning service or $25 off disinfection services. If you’re interested, shoot Sarah Trivitt a text at 512-963-9390 or an email at firstname.lastname@example.org.
The April 2020 market statistics for the Austin metropolitan area from our friends at Independence Title are available for download here. Some statistics were quite surprising (median price appreciation), while some were not surprising (drop in the number of sales.) Reconciling what seems like conflicting information is interesting, but we were able to make sense of it.
Median Sold Price increased by +4.4% in April 2020 over April 2019. We also saw Median Days on Market decrease by 5 days, or -31.3%. Likewise, median Sold Pric/SqFt increased by +2.5%. In the middle of a pandemic and recession, homes are selling faster, and for more money. How?
When we looked at past recessions, we saw that prices either stayed flat or declined slightly, but they didn’t go up. April numbers show that the number of pending properties (those that went under contract) fell by -25.7%, which indicates less buyer demand. Generally, less buyer demand means lower prices. However, sellers are also choosing to sit out, with -21.3% fewer new listings on the market in April 2020 than in 2019. This means that supply is also decreasing, and doing so at a similar rate as demand is decreasing. This phenomenon is causing inventory to stay relatively unchanged at 2.6 months. This means that our overall market is still a seller’s market, even though demand has decreased. Since we’re in a seller’s market, it’s not surprising that prices have appreciated moderately at 4.4%.
If prices are still inching up & we’re still in a seller’s market, then what has changed?
Total sales & sales volume have both declined as buyers and sellers have chosen to sit and wait. Total sales were down -25.7% in April and sales volume was down -23.1%. Fewer buyers are in the market, fewer sellers are in the market, so there are simply fewer sales.
What does this mean?
If you’re a buyer, the market is still tight. Prices will likely not come down during this recession, and if they do come down, it will be moderate. Likewise, prices could move up moderately. It’s literally harder to buy a home right now, but it’s not a bad time to buy if it makes sense for you. If you do choose to wait to buy, next year is likely fine, as well – prices could be a little higher and they likely won’t be much lower.
If you’re a seller, the market is still good. It’s likewise literally harder to sell a home right now if you’re living there, but it’s no harder to sell a home now if it’s vacant. It’s definitely not a bad time to sell, if your personal situation doesn’t make it hard. If you need to sell an occupied home, you’re also likely in good shape, though the logistics are a little tougher.
It’s important to understand that these numbers are all very high level. Different sub-markets within the Austin metro have been affected differently. Most relocation buyers have hit pause, so relocation heavy sub-markets are more sluggish. Likewise, homes in the $1.5M+ range are moving more slowly, as luxury buyers’ portfolios have generally taken a hit. Each sub-market in Austin has been affected differently, and some are dramatically different than others.