Curious about the value of homes in the Doss Elementary attendance zone? A total of 215 homes changed hands in 2018, and we’ve got the scoop. We analyzed the data to bring you this overview of our overall neighborhood real estate activity in 2018. For purposes of this report, we focused only on those Northwest Hills homes that feed into the Doss Elementary attendance zone.
THE AUSTIN REAL ESTATE MARKET IS SHIFTING
Across the country our real estate markets are slowing. This shift in the market affects all parts of the nation differently. Indeed, some cities began to feel the slow down several years ago. As for Austin, we are fortunate to experience significant appreciation thanks to our job growth and low home inventory. Even so, our local conditions are changing. I see this most in our seasonal sales cycle. In recent years our cycle has shifted with shorter ‘hot market’ periods and longer periods of ‘cold market’ conditions. I anticipate that trend will continue in 2019. As expected, rising interest rates are also having a depressive impact.
|Total Sales||Homes||Condominiums||Townhomes||Multi Family|
SO HOW DID THE NORTHWEST HILLS REAL ESTATE MARKET FARE IN 2018?
Overall the portion of Northwest Hills that feeds into the Doss attendance zone saw 4% appreciation with the average single family home costing $820,831. If we look back just six years, we are up a jaw-dropping 45% since 2012. Go Doss Owls! That’s a nice return if you look at your home as an investment, but not so nice when it comes to paying property taxes… Even though homes appreciated in value, the number of real estate transactions for the Doss portion of Northwest Hills is on the decline. I think this will continue over time. Not because Northwest Hills isn’t desirable, but because (1) so many homeowners have a comfortable mortgage (due to interest rate or amount owed), (2) we have a large proportion of families that don’t want to change school zones unless necessary, and (3) the rate of appreciation across Austin makes it difficult to find similar or comparable homes at the same price. That all means fewer people are selling, and fewer homes are hitting the market.
As for the real estate cycle I mentioned earlier, here in Northwest Hills (and the rest of Central Austin in general), we saw a robust market at the start of 2018. By June, however, we experienced general sluggishness followed by bargain hunting starting around October.
WHAT’S POPULAR AMONG SINGLE FAMILY HOMES?
Homes that are nicely updated or new are performing the best, showing us that there’s still a strong desire to find a home that is move-in ready. Popular features include natural light, an open floor plan, ample storage space, reasonably sized bedrooms and closets, and an owner’s bedroom with in suite bathroom. There’s also high demand for 5+ bedroom homes. Like in years past, we personally had clients that wanted to buy a large home in Northwest Hills, but our low inventory (meaning a lack of homes that are updated with reasonable quality) drove them to ultimately purchase homes in Davenport Ranch, River Place, Steiner Ranch, Lakeway, and Spicewood at Balcones. (For anyone looking to cut costs, Spicewood at Balcones strikes me as a less expensive version of Northwest Hills.)
WHAT DO THE SALE PRICES LOOK LIKE FOR SINGLE FAMILY HOMES?
During the Spring 2018 it was difficult to find a home under $800,000. By the fall that shifted, with $700,000 being the magic number for most homes in the Doss attendance zone, so long as buyers were willing to tolerate outdated design and tackle deferred maintenance. Anything below $700,000 tended to be a full-blown fixer upper. This chart shows single family home sales played out:
|SINGLE FAMILY HOMES||average sales price||median sales price||% of original asking price||# of sold vs. didn't sell|
|2018||$820,831||$761,900||95.1||127 vs. 43|
|2017||$789,190||$740,000||95.8||144 vs. 33|
|2012||$564,538||$532,000||101.5||165 vs. 28|
It’s no surprise our Northwest Hills homes are getting more expensive. Twenty-two out of 127 homes (17%) sold for over $1,000,000. So what does a $1,000,000 home look like in our neighborhood? If you factor out a couple of outliers, the average $1M+ home had four bedrooms, three bathrooms, with 3,886 square feet of space. In the $1M+ range, on average homes got 91% of their list price, took 65 days to sell, and sold for an average price of $1,2248,600.
The most expensive home sold in 2018 was on a 16 acre estate-sized lot. The home was dated, but the lot was spectacular. I had a client interested in this house, and for good reason; the land value alone was worth the $1.8 M sales price. Kudos for the new buyers for getting a great deal!
Price per foot never tells the whole story, but it is something I’m asked about often. With prices creeping up, our Doss homes have a new baseline of $250-300 per square foot. Of course, some homes sold for more and some for less, depending heavily on the quality of the home, and more importantly, the location within the neighborhood.
If you’re curious, the award for highest price per foot goes to a new construction home with 5 bedrooms, beautifully designed, on an interior lot, with no view, and no pool. It sold for a whopping $452 per square foot!
On the low end, we only saw two homes sell for under $200 a square foot – one for $190 and another for $198 a foot. Of the 127 single family homes sold in the Doss attendance zone, 31 of them sold for under $250 a square foot.
And please remember, these are just stats. Every house is different, and every sale is unique. Please reach out to someone with extensive experience in the Central Austin market to consider how this data can impact your personal situation.
WHAT ARE THE TRENDS FOR CONDOS AND TOWNHOMES?
It was an interesting year for condo and townhome sales. Unlike single family homes, the average or median price for condos and townhomes did not increase. In fact, the average price of a condo declined.
With prices flat or declining, what I’m about to say may seem counter-intuitive. My research shows that were actually more successful sales of townhomes and condos in 2018 than single family homes. There are too few sales in this category to draw any broad conclusions, but based on my calculations it breaks down like this:
2018: 77% of homes successfully sold vs 83% of condos/townhomes
2017: 81% of homes successfully sold vs 90% of condos/townhomes
2012: 85% of homes successfully sold vs 56% of condos/townhomes
As traditional homes have grown more expensive, the lower price point of condos and townhomes have created a path of home ownership for those that want to live in Northwest Hills but can’t yet afford a single family home. In short, the demand is driven by affordability.
|TOWNHOMES||average sales price||median sales price||% avg of original asking price||# sold vs. didn't sell|
|2018||$381,993||$374,000||95.8||22 vs. 4|
|2017||$381,974||$338,000||95.75||23 vs. 2|
|2012||$226,215||$212,500||93.94||20 vs. 9|
|CONDOS||average sales price||median sales price||% of asking price||# of sold vs. didn't sell|
|2018||$261,911||$239,000||98.21||60 vs. 13|
|2017||$284,365||$263,450||97.44||58 vs. 7|
|2012||$173,283||$146,250||95.41||48 vs. 45|
SO WHERE IS THE NORTHWEST HILLS REAL ESTATE MARKET HEADED IN 2019?
I don’t have a crystal ball, but my 25 years of experience in Central Austin real estate tells me that homes in the Doss attendance zone should see another 4% appreciation in 2019. This aligns with our historical averages.
Of course, interest rates can have a big impact. If we see higher interest rates return as I predict, it will take longer to sell homes than we’ve seen in years past, buyers will be more selective, and we’ll see less speculative construction from builders. So what to do? All in all, here’s my advice for the year:
If you are a seller:
Hold on to your property if you can and let those long-term appreciation rates make you more money. I expect demand will only increase once the new Doss Elementary School is constructed, so keep that in mind as well.
If you need to sell this year, do it before summer. We’ve seen a 6 – 8% price difference for homes sold during the spring than those that go on the market later in the year. Take advantage of the seasonality to maximize your price.
Also, put some effort in preparing your home for market. Painting, cleaning, landscaping, and staging are all more important now than they were in the days of the sizzling hot seller’s market. Buyers are willing to pay more for updated homes that are move-in ready. If you need help, just say the word. Our new home preparation program helps initially cover these upfront costs so you don’t have to come out of pocket.
If you are a buyer:
First off, don’t wait for a so-called buyer’s market. It’s true that we went from a red hot market to normal, but I don’t see the market going cold, nor do I see prices plummeting. To the contrary, we have a ton of great jobs coming to Austin, and the only issues slowing us down are traffic (pun intended), interest rates, and this prolonged government shutdown. All that to say, I anticipate that Doss homes in Northwest Hills are going to hold steady with slightly slower growth than in the past.
Second, if timing isn’t an issue, hold off buying until the summer or fall when prices tend to be lower. The trade off is that inventory is lower then too. Use the link below to see what homes are actively for sale in the Doss attendance zone, or reach out and we can set up a custom search tailored to your needs.
LIKE WHAT YOU READ? LET’S TALK.
We live and work in Northwest Hills, and you’ll likely see us at the bus stop in the morning or picking up in the afternoon. We’d love to grab a coffee with you. We can discuss the perils of cast iron plumbing and aluminum wiring that’s so prevalent in our neighborhood, go over the three steps that sellers should take to optimize their sales price, or just shoot the breeze. Either way, we’re looking forward to it.
© Homesville Realty Group 2019
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