Austin - Thursday, April 26 Remember '00, home sellers: You may never see its equal

By Shonda Novak
American-Statesman Staff
Thursday, April 26, 2001

New figures show that sales of single-family homes in Central Texas fell 8 percent and the number of homes on the market in March shot up by 95 percent from the same month a year ago.

March was the fifth straight month in which sales figures were down compared with the same month a year ago.

Nationwide, two separate reports Wednesday showed a robust housing market in both new and existing homes.

In Central Texas, 2000 was a banner year, real estate agents say, and 2001 may not measure up.

"Last year was insane," said Brad Pauly, a real estate agent with the Presley Group, a division of JB Goodwin Realtors. "It's like Mark McGwire hitting 70 home runs . . . shattering the record of 61. You may never see 70 again, but hitting 60 the next year is still an incredible feat."

Central Texas had a four-month supply of homes in March -- 5,422 -- up from a two-month supply, or 2,785 homes, in March 2000. A supply of six months or less is considered a seller's market, said Tom Polk, chairman of the Austin Board of Realtors and an associate with Stanberry & Associates.

With nearly twice as many listings as last year, Polk said, "I wouldn't be surprised if some buyers were taking more time to look, and that sometimes slows the buying process, whereas last year, it was, 'I better take what I can get.' "

But some premium properties -- appropriately priced, well-maintained homes in good locations -- are getting multiple offers and moving quickly, Polk said. Homes that sold in March were on the market for an average of 36 days, down from 41 days in March 2000.

The figures from the Austin Board of Realtors comprise listings in Austin and surrounding areas, including Travis, Williamson, Hays, Bastrop and Burnet counties. Most of the listings are for existing homes; about 15 percent are for new homes or homes being built.

Nationwide, sales of existing homes rose 4.8 percent since February to an annual rate of 5.44 million, according to the National Association of Realtors. New home sales increased to a record 1.021 million annual rate, up 4.2 percent from February's pace, according to the Commerce Department.

Mortgage rates are down from last year, although they've been creeping up in the past month. National average rates for 30- and 15-year mortgages last week were 7.14 percent and 6.66 percent, respectively, according to Freddie Mac, the mortgage company.

Those rates, combined with net job growth, helped the Central Texas housing market. Although unemployment is up to 2.5 percent, jobs are still being created, economists say.

"This is still, regardless of what anyone thinks, one of the hottest markets in the country," Pauly said.

Still, the perception of a softening housing market has prompted some to put houses up for sale now.

"People are starting to fear the market is turning a little bit," Pauly said. "They thought their property was going to keep appreciating at the high rate it has for the last four or five years. When we saw it kind of level off, people said, 'I better get out while the getting's good.' I think they're saying, 'Let's take the money and run.' "

Figures from the Austin Board of Realtors and the Texas A&M Real Estate Center show 1,336 homes were sold in Central Texas in March, compared with 1,452 in March 2000, with 98 percent selling at their list price. During the first three months of this year, agents sold 3,326 homes, down 6 percent from last year. There were 4,698 listings during that period, up 70 percent from a year ago.

The median price was $148,750 in March, up 7 percent from a year ago but down from February's $156,950. The median means half of the homes sold for less than that amount and half sold for more. The March-over-March increase in median price reflects a continued tight supply, Polk said.

Data on new home sales will be available for the Austin area next month, according to American Metro/Study Corp., which tracks new home sales in Texas.

Milburn Homes, which builds houses priced from $120,000 to $210,000 in Central Texas, sold 468 homes during the first three months of this year, down 3 percent from the same period a year ago -- a negligible decrease, sales manager Kent Zarbock said.

If local economists' projections for job growth are correct, Zarbock said, "I think we'll still show pretty strong sales through the end of the year."

The decrease in sales so far this year reflects a lack of lots to build on more than it reflects a slowing economy, he said. Low unemployment, net job growth and high apartment occupancy and rental rates all mean a continued tight housing supply, he said.

One custom builder saw signs of slowing. "We don't seem to have quite as many people coming through the models as we did this time last year, and there doesn't seem to be as big of a rush on their part to buy as there was this time last year," said Jim Craven, sales manager for D.R. Horton Custom Homes Inc., which builds houses in the $200,000-to-$500,000 range. "They're waiting to see what happens with the economy and waiting to see if interest rates keep coming down."

You may contact Shonda Novak at snovak@statesman.com or 445-3856.

-- Anonymous, April 26, 2001

Answers

Geez I hope so. Been trying to buy a house up here for well nigh on a year now, and prices keep going up, with houses disappearing within a week of hitting the market. If demand dies, maybe we will be able to finally do some real shopping around. Bad as it sounds, I hope the economy slows a bit too, so some of the rich-on-paperoids will dump their "3000sq foot house-for-two"s at a reasonable price. It has always bugged me to see the phrase "$500,000 starter home". Maybe this will be the end of that nonsense.

-- Anonymous, April 26, 2001