With the summer buying season coming to a close and the start of the school year less than two weeks away, it’s a good time to look back at the first half of the year and look ahead at what might happen during the final quarter of 2014.
The Lake Travis real estate market started off in 2014 where it left off in 2013 — with a low inventory of single family homes for sale. The demand started as early as February and it didn’t take long to see multiple offers start rolling in and competition between home buyers heat up.
Looking back now you can see that it wasn’t uncommon for the average days on market to be 10 days or less and the sale-to-list price ratio at 99% or above — meaning that most homes were selling at or above list price.
After one of the hottest markets in the Lake Travis area since 2006, many sellers had decided back in the fall to get their home ready to sell by springtime. By April and May we finally started to see the inventory of homes in the Lake Travis area increase.
And there’s an interesting thing to note when you are coming off a year like we had in 2013. It’s something that you don’t always see when looking at market conditions for the whole Lake Travis area. It shows up when you start to dial in on a group of homes within specific neighborhoods and specific price ranges.
It’s called — Overpriced Homes.
A lot of homes came on the market overpriced and have failed to sell for the last three months. It’s a common occurrence that happens in every real estate market when prices are on the rise. Not all the homes that fail to sell are overpriced, but it’s a good chunk of them.
You can look at the statistics now and see how it’s beginning to play out in many Lake Travis area neighborhoods. In some neighborhoods, the inventory of single family homes has more than doubled from where it was last year at this time. The average time it takes for a home to sell has increased and homes that have failed to sell in 30 days or less are getting marked down in hopes of selling before the summer buying season comes to a close. Another area to note is the drop in list-to-sale price ratio as sellers are beginning to take less than the original list price.
The market started off with a bang but simmered down as inventory increased and a wave of overpriced homes entered the market. It’s likely you’ll see an uptick in closings as the seasonal trend has always supported this and home buyers in the Lake Travis area are closing on homes just before the Lake Travis and Leander school year begins on August 25.
With all that being said, the Austin Board of Realtors® reports:
Mid-year statistics show Austin-area home sales increased three percent year-over-year to 13,426 homes sold, putting 2014 on pace to potentially exceed 2013’s all-time high in sales volume.
What you’ll want to watch out for next is how many of the homes that failed to sell over the summer exit the market after school starts. This will cause inventory numbers to drop which could help keep prices stable throughout the fall. Home buyer demand is likely to taper off but will usually find a balance as the number of new listings entering the market at this time decreases.
Not everyone can time the market to the seasonal peaks, but homeowners that can prefer to wait and list their home in the spring. If inventory numbers decrease enough over the fall / winter months, rates continue to be attractive and buyer demand remains strong, the Lake Travis real estate market could start of with another bang beginning in early 2015.
Keep in mind, this is a combined look at the overall residential real estate market in the Lake Travis area and smaller pockets within Lakeway, Bee Cave, Spicewood, Four Points and the North Shore of Lake Travis. Just like the weather, you have many localized developments within these areas that could be experiencing a completely different market.
Check out the Lake Travis Real Estate section for more information on historic landmarks, area neighborhoods, buying and selling tips, and local market conditions. And don’t forgot to try out our new Lake Travis Area Property Search.