Austin Hot or Not - Market Update August 2019
You just can't keep a good baby out of your market update. We tried a vertical video this month because most people look at stuff on their phones. I personally hate it, but I am a video purist. What do you think?
Active listings year over year in Austin are down by 14%, while in South Austin active listings have increased by 10%. Inventory in Austin as a whole is decreasing, but we have seen an increase by 4% since June. The inventory for South Austin has doubled since June, flooding the market.
The number of sold listings in Austin are down by 6% year over year, whereas South Austin’s are up by 4%. The number of active listings in Austin are shrinking, and the number of sold listings are also declining by a little less than half. This means that we should see an upcoming increase in price.
The Median Sales Price in Austin ($430,000) is up 6% year over year, while the Median Sales Price in South Austin ($357,000) has declined to 3%. In Austin properties purchased at the current median price of $430,000 would have appreciated by about $24,000.
With the 2008 recession still fresh in mind for some, a great concern recently has been a growing fear of an upcoming recession. A big misconception is that recessions lead to a housing crisis. This year economists, analysts, CFOs, and members of the National Association of Business Economics completed a survey predicting when the next recession will begin.
The graph below depicts the combined data for all four surveys, showing that 46% of people who participated predict that the recession will commence next year. The majority of people who participated in the surveys believe that the recession will begin anytime from now until the end of next year. Experts say that the recession in 2008 would have been less severe if panic was not a factor.
The United States is now in the longest period of recovery between recessions in history. It is natural for a slowdown in economic growth, industrial activity, and commerce to occur, typically on a ten-year pattern. A recession is simply a temporary slowdown or decline in which GDP falls for two consecutive quarters. In the Pulsenomics Survey, analysts predicted that trade policy, a potential stock market correction, or a geopolitical crisis will be the leading factors in an upcoming recession. A housing slowdown was not even in the top five potential causes of a recession.
Despite the predicted upcoming recession there is data that highlights recessions do not equate to a housing crisis. In the past five recessions home prices only dropped two times. One being the most recent 2008 recession where the price of homes dropped by nearly 20%, while in 1991 they fell less than 2%. Three out of the past five recessions prices of homes actually increased, and two out of those three times they nearly doubled the historical normal average.