In a previous post, I discussed how the effects of the coronavirus on the Austin housing market are still uncertain. Since, writing that post, many things have changed. A shelter in place order has been put into effect for the City of Austin, Travis County, Williamson County, and Hays County. Each of these ordinances varies slightly, and while real estate services are included as an essential professional service, the extent to which a REALTOR can perform his or her job duties is limited by these orders. The City of Austin ordinance as well as the Travis County order explicitly prohibit the showing of homes during the coronavirus shelter in place.
While other counties do not necessarily prohibit showing homes, the spirit of all orders is to allow real estate services that are truly essential. Assisting in the successful completion of closings for homes that are already under contract, providing critical property management services, and housing unhoused individuals is permitted while maintaining social distancing protocols. That being said, these orders severely limit the amount of real estate activity that can legally take place.
On March 20th, I took note of the recent market activity for residential homes in the greater Austin area. All stats that follow are based on statistics for all single family homes in the Austin MLS. This includes homes, condos, and townhomes. From 3/19/2020 to 3/20/2020, there were 287 new home listings. One week later, the number of new listings dropped by 114. The number of pending home sales similarly decreased but not nearly as dramatically. On Friday, March 20th, there were 136 pending home sales. In comparison, we saw 18 pending home sales on Friday the 27th of March. Additionally, home sales decreased from 145 on the 20th to 108 on the 27th.
The number of homes leaving the MLS is also indicative of the effect of Covid-19 on the Austin real estate market. Between March 19th and March 20th, 16 homes were withdrawn from the Austin MLS. That number rose to 23 between 3/26/2020 and 3/27/2020. Real estate agents also have the availability to change the MLS status of homes to temporarily off market. On Friday the 20th, 35 homes were changed to this temporary status. Yesterday, March 27th, there were 47 homes that went to temporarily off market status. These numbers are more substantial when looked at from a greater duration of time. In the 3 days prior to 3/20/20, 91 homes went to temporarily off market status. In comparison, 196 homes were temporarily taken off the market between March 25th and March 27th.
In short, Covid-19 and the resulting shelter in place orders are affecting the Austin real estate market. If you can’t physically show homes, there will be far fewer home sales. In my personal business, I am seeing these effects first hand. Clients who planned to list their homes and buy new ones are holding off until after the coronavirus pandemic. My new construction deals are continuing; however, the implications of the shelter in place orders will very likely slow construction on many homes. As always, if you have specific questions feel free to contact me.
As the coronavirus provides a very real concern to most of the world, one of the most common concerns among many Americans is how to face the immediate concern of boredom. The vast majority of us are practicing social distancing, and staying at home as much as possible. However, you can only binge Netflix for so long, before the yearning to do anything else really kicks in. Now is a great time to think of ways to make this time as productive as possible. Consider tackling some home projects to ease your boredom as we face this global pandemic. If you need supplies, most hardware stores are still open, and many offer online ordering to minimize your interactions. Here are some of my personal suggestions for staying busy around the home.
1.Tackle Deferred Maintenance
Before you start thinking about watching youtube videos on how to re-tile your master bath, it’s best to start with the regular routine maintenance you may have been neglecting. Do you remember the last time you changed your air filters? If not, now’s a great time to change them. How about that towel rack that came loose 6 months ago? Why not get out your screw driver and finally fix it? Look around your home, and identify all of the little projects that you know need to be addressed. Then, get to work on fixing them one by one.
While you are identifying the deferred maintenance items on your list, you may have noticed areas where you need to do some touch up paint. Hopefully, you have some extra paint on hand, and can touch up those spots easily. If you don’t, you may want to hold off on that project until after the coronavirus season. However, if you’ve had aspirations to paint an accent wall, or like me have considered an elaborate paint stenciling project, now’s a great time to pick up the roller and get to work. If you’re looking for inspiration, I ordered my wall stencil from a great US company, Cutting Edge Stencils, they have plenty of ideas for using their stencils on their website. Don’t limit yourself to just walls, you can also paint tiles, furniture, and patios.
With everything happening in the world, the idea of spring cleaning is now more important than ever. In addition to disinfecting hard surfaces, light switches, and door knobs consider some more extensive cleaning projects too. Why not think about cleaning out your junk drawer, organizing your closet, and re-claiming your garage? Why not Marie Kondo your entire home? You know you have the time.
I don’t know about you, but just seeing a bright colorful flower brightens my day. That’s why I planted some blue delphiniums in my front porch planters early this week. If you can’t make it to a store to purchase plants right now, that doesn’t mean you can’t work on your garden. You can pull weeds, move rocks around to create beds, and prepare the soil. You may also have some seeds on hand. I found a bunch in my junk drawer earlier this week. Now, I have a nice little cropping of sunflower, tomatoes and basil seedlings that have started growing in my windowsill. Now, more than ever you may recognize the benefits of growing your own produce.
As is the case with almost every aspect of our lives, there is a lot of uncertainty around how the coronavirus will affect the local housing market. Over the past few years, the Austin housing market has been increasingly competitive with the average home sales price rising year over year. Will Covid-19 slow sales or will buyers jump to take advantage of historically low interest rates?
The Impact of Covid-19 on Austin Home Buyers
The coronavirus has began to change our daily lives. Many are practicing social distancing, self-quarantining, and generally spending less time outside of the home. Going into someone else’s home is just one more opportunity to come in contact with germs, and surely there are quite a few buyers foregoing showings at the present moment. According to a survey performed by the National Association of REALTORs last week, only 16% of real estate agents said the coronavirus has affected buyer interest. However, I would have said the same thing last Monday when surveyed. It wasn’t until last Tuesday, that I heard from my first buyer client that they would be holding off on their home search until the Covid-19 scare blows over.
Will the Coronavirus Reduce the Number of Homes on the Market?
Sellers may also have fears about letting strangers into their homes. In Austin, we have had incredibly low inventory for far too long. There are simply not enough homes for sale to accommodate the ever growing buyer interest. Will sellers decide not to list their home due to fears of contamination? It’s quite probable, and this will only exacerbate the low inventory issue. Builders too are seeing the affects of the coronavirus. Nearly 1/3 of our raw building materials come from China, and this doesn’t even account for assembled goods such as appliances and fixtures. First hand, I’ve already witnessed supply chain issues, with new home buyer clients unable to get tile they had originally ordered since it was produced in China. If builders are delayed due to material delays, and sellers are reluctant to list, it won’t matter that interest rates are at historically low levels. Buyers won’t have any homes to buy.
How Will the Corona Virus Impact the Seasonality of the Austin Real Estate Market
We are just entering what is typically the spring selling season in the Austin area. Usually, this is when the largest percentage of sellers list their home, and the majority of buyers purchase. Home sale prices are usually the highest in the coming months as buyers compete with one another to move while school is out of session. However, it’s unknown how the coronavirus will affect the seasonality of the Austin market. Will it delay the spring selling season? Will it have no affect at all? Or, will it cause a mass recession leaving buyers unmotivated to make moves. After all, what good is an incredibly low interest rate if you are not sure you will have a job next month.
What Can We Learn From the Past?
In the past, Austin has been largely spared from housing market collapses. In 2009, the median sales price dropped from $192,000 in 2008 to $190,000. It increased to $195,000 in 2010 and stayed the same for 2011. Since then, the median sales price has been steadily increasing. We wrapped up 2019 with a median sales prices of $315,000 for the greater Austin area. While the median sales price changes from 2008-2011 were not too significant, the number of sales dropped significantly beginning in 2007. Between 2007 to 2008, the number of home sales in the greater Austin area dropped by about five thousand, and the number of home sales continued to slowly decline each year until 2011. In 2009, the Austin real estate market saw its lowest number of annual sales with only 18,632 sales occurring. In comparison, 35,437 homes sold in the greater Austin area last year.
It’s not unrealistic to think that the coronavirus may slow Austin area home sales yet again. Furthermore, if there is one area that may be more affected than others, I suspect it will be the luxury home market. After the housing market crash, we saw these types of homes suffer the most.
Overall, it’s still too early to say how the coronavirus will affect the Austin market. If you have questions about how it may affect your specific real estate goals, give me a call. I’m happy to share my opinions with you.
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