Circle C Housing Market Update January 5, 2019
Hey neighbor, got a few minutes? Let’s take a quick look at Circle C’s last six months of home sales and as an added year-end bonus: the 1-year, 5-year and 10-year average price per square foot numbers across the 18 distinct communities within Circle C.
The past six months and annual totals
First, from July through December, we recorded 178 homes sold in Circle C. The average sold price was $516k or $183/sf. 23 of those sales were closed in December. Median price for December was $465k. As predicted, we recorded just under 370 homes closed for Circle C for the year, 367 to be precise, with prices ranging from a low of $349,500… a high of $1,190,170… an average of $512,854… and a median sold price of $483,235. Remember not all sales are captured in the MLS – most off market homes are new construction and never reported through the MLS.
As a point of reference, in 2017… we saw 353 homes close. So, the number of homes that sold year over year increased by 4% (14 units). See Table 1 below to see the high-level year over year stats.
|Homes Sold||353||367||Up 4%|
|Minimum price||$306,500||$349,500||Up 14%|
|Average price||$497,969||$512,854||Up 3%|
|Median price||$474,130||$483,235||Up 2%|
|High price||$1,450,000||$1,190,000||Down 18%|
Table 1: Year over Year comparison
CAGR versus Appreciation Rate
Before we dig into the longer time range changes, it’s important to clarify the measurement to not mislead. The following numbers are called CAGR or compound annual growth rate. CAGR is a measurement that smooths that annual rate of change over a specific time period. At first glance, one might say CAGR is like an annual appreciation rate… but, true appreciation rate also considers currency inflation or deflation. CAGR does not. Nevertheless, it is a fair representation of the direction of an asset – in this case the asset is a neighborhood average or median sales price, which we project on the value of a specific property. The bottom line is this is an academic exercise performed at a fairly high-level and may or may not hold true at the individual home level.
The 1-year, 5-year and 10-year rate of change
We’ve been tracking home values in Circle C since 2003… but, we are only going to talk about the 1, 5 and 10 year values today. That’s comparing the average sold price per square foot (S$/SF), for 2018 versus 2017, 2014 and 2009. It’s also important to note that the economy was significantly different in 2009 (remember the great recession?). Due to limited space, we will talk briefly at the entire subdivision level (Circle C) but for more details, you may want to see how your particular ‘neighborhood’ faired over the same time period… you’ll see how to do that in the final paragraph.
Ready? Good. Year over year the average sold price per square foot in Circle C rose from 177/sf to 184/sf. That represents a 4.3% increase in average sold price / sf. If we look back to 2014… the average sold price / sf was $151/sf…. So, a 6.6% increase compounded per year gets us to the same $184/sf in 2018. Now, lets reach back to 2009 when the average sold price per square foot was $115/sf. Wow, that’s a (184-115)/115 = 60% increase in average sold price / sf in ten short years. The CAGR (annual growth rate) required to achieve that increase is 5.54% per year. See Table 2 below for a quick summary of CAGR and Increase (decrease) in average sold price / sf for Circle C.
|Measure||1 Year||5 Year||10 Year|
|Increase (Decrease) Percent||(184-177)/177= 4%||(184-151)/151= 22%||(184-115)/115= 60%|
Table 2: CAGR and Increase in Average Sold Price / SF
The Take Away
Any way we look at it we see home values on the increase. But are they rising too fast? Maybe. Home values have increased faster than wages and with the rising interest rates (projected to end in the 5.5% to 5.8% by the end of 2019), I would guess that while the market in Circle C (and just about everywhere in Central Texas) would still be considered a seller’s market… I don’t think we’ll see the big growth year over year that we experienced back in 2014 (that year values rose 10.1%).
For More Information
For more information about the Circle C housing market and your particular neighborhood click here to view the updated Market Stats report on MoveToCircleC.com or AustinRealEstatePartners.com. There you’ll see a google map with specific values for each neighborhood and if you scroll down a little two tabs with more information – one for the prior six months and one for the annual growth rate.
Still have questions about the market or what your home value could be today? Call me directly at (512) 288-8088 and I’ll do my best to provide an answer and there is no obligation.