As we end the first quarter of the year, national speculation shows that sales are down in some areas of the country. This could be due to the onslaught of winter storms during the first quarter of the year, experts say. This has caused the fed to re-consider their tapering of QE3, also know as quantitative easement.
Sales are expected to grow through the summer as new developments come online. Outside of Austin, most of the new development neighborhoods are being erected in Leander, Cedar Park, Georgetown and many parts of Hays county.
At this time, the February numbers, which were just released, show median home prices up 10% over one year before, standing at $225,000 in January. The average home price was up as well, 11% to $288,650.
Area 7, which encompasses Barton Hills and Zilker, shows the median home price up a huge 16.8% year over year, landing at $550,000. The “average price” is down (presumably because the data is showing less properties and the homes that sold were down). Both the average and the median price per square foot show a decrease in price. The data also shows that in February 2013 of last year there were 8 properties. A very small sampling of data shows there were 20 in the same time span of 2014. So are values down in area 7? There is also the “pocket listing” problem. Many agents are electing to try to sell properties off market for various reasons. This is fine, but if it is not put into MLS, then your neighbors will not realize the gain, through appraisal, when they list the home.
For example, if the comparable properties only sold for $640,000 and you believe that someone will buy your home for $700,000, you can list your home for $700,000 and find a ready, willing and able buyer who will pay the asking price, but if this buyer is getting a loan, and the appraisal comes out at $640,000, the bank will only lend to that amount. Meaning that the only way to circumvent this is to get a cash buyer or to negotiate the financing contingency out of the contract. We’ve done this a few times on the latter, but only if there are several offers, and the winning buyer is able to bring in cash over and above the down payment. Ideally, Austin real estate agents should put pocket listings into MLS after they close in order for subsequent sales to appreciate properly.
As the summer season approaches, be prepared to see multiple offers throughout on reasonably priced properties. Also be prepared to see interest rates rise as we enter the fourth quarter of the year and the Feds QE3 tappers.