It’s no secret that we are operating in a very competitive up market right now. That makes it challenging to buy houses right, but gives us a little margin for error on the selling side. As our friend Shenoah Grove puts it, “We’re currently eight years into our five-year cycle.” A “typical” real estate cycle is five years of increasing prices followed by two or three years of “market correction.” The Austin area is in its eighth year of increasing prices, and there’s no indication of a change anytime soon.
In May, the median cost of a home in Williamson County, where we do most of our work, was about $288-thousand. In Travis County, it was $346-thousand, and in Austin proper it was $355-thousand. Although those numbers are averages and some neighborhoods experience more or less (or even negative) price growth, prices were up about 5% throughout the area.
Our current low inventories should keep prices rising for a while. Inventory is figured by taking the number of houses available for sale and dividing it by the number of houses sold in a month. Williamson County and the City of Austin have only 1.9 months of inventory. That means if there were no new listings, every house available would be sold in less than two months! A “stable” market normally has about six months of inventory. The worst area in the greater Austin region has only three months of inventory.
All this is great news if you’re a seller, not so much if you want to buy.