Housing sales are seasonal. Most houses are bought and sold in the summer, and prices tend to follow sales, rising in the spring, and falling in fall. So you can’t really look at month-to-month changes. You have to go back to the same time of year, at least one year before.
Austin Housing Sales, Month to Month
As you can see from this chart, Austin housing sales, when compared to the same time one year earlier, have been falling for the past two years or so. The top yellow line represents sales from June 2006 to June 2007, and from June 2007 to June 2008. The other two lines represent October and January, respectively.
Fewer homes were sold last January – Jan 2009 – than at any time since January 1998. 914 and 727, respectively. (All stats are from Real Estate Center at Texas A&M.)
In terms of percentages, the changes, on a year over year basis, have been dramatic.
Year Over Year Percentage Change Austin Home Sales January 2006 to January 2009
The number of houses sold in Austin has fallen on a year over year basis every month for the last 20 consecutive months. Perhaps worse, the declines seem, if anything, seem to be accelerating.
Prices, on the other hand, have continued to climb, until recently.
Austin Home Prices, Percent Change, Year Over Year
How can prices climb while sales are falling? It often takes a while for prices to adjust. Owners are understandably reluctant to reduce their prices, and those that can afford to will simply wait, and hope that prices will go back up again.
So what’s happened is houses are sitting.
The months inventory – the number of houses on the market, divided by the number that sell each month – has risen from 3.6 in January 2006 to 7.3 in December ‘08 to 11.3 as of last month (Jan 09).
That, despite the fact that the total number of listings has actually fallen. Fewer people are putting their houses on the market, but the number selling is dropping even faster.
Months Inventory Austin 2006 to January 2009