Foreign Investing

After years of amassing huge real estate portfolios, investors from abroad sold $13.4 billion of property in the 2nd quarter of 2019, according to Real Capital Analytics. During the same quarter, foreign investors purchased $12.6 billion of real estate, the first time since 2013 that foreign investors have sold more U.S. commercial real estate than they bought in a quarter. The strong dollar may have something to do with this:  If you bought a US asset a few years ago when the Euro was above 1.3 to the dollar, selling it now when the exchange rate hovers around 1.1, you automatically create a 15% plus gain…..purely from the currency exchange. (WSJ)

Foreign money managers still see U.S. assets as a haven and have been piling into U.S. stocks and bonds, buying nearly $64 billion in these assets in June, the largest sum since August 2018, according to data from the Treasury Department. (WSJ)

Home Appreciation

A new report from CoreLogic, suggests that annual home-price growth will increase by 5.4% by July 2020, a shift from what has happened over much of 2019. The S&P CoreLogic Case-Shiller index registered the slowest pace of home-price growth since 2012 in June of 2.1%. A year earlier, home prices were rising at an annual rate of 6.3%. New York, Miami and Seattle, actually experienced a decline in home prices either on a monthly or annual basis. In recent months, home-price growth had become weaker as would-be buyers were priced out of these and other markets. The report estimates that nearly 25% of US metropolitan areas were undervalued and 40% of markets were at value. They estimate roughly 33% of markets nationwide are overvalued.

“With the for-sale inventory remaining low in many markets, the pick-up in buying has nudged price growth up. If low-interest rates and rising income continue, we expect home-price growth will strengthen over the coming year.”

– Frank Nothaft, chief economist CoreLogic.

Las Vegas: Temperatures Rising

Las Vegas is the fastest-warming city in the United States, its temperatures having risen 5.76F since 1970. Vegas will likely experience 96 days of heat above 100F by the end of the century, including 60 days over 105F, and 7 “off the chart” days that would break the current heat index. Sun is good for solar energy with MGM resorts having acres of solar panels atop its resorts and convention centers!

City of Austin Breakdown

Average Price:

Average prices have risen 4% YoY. This indicates that there is a high demand for property and not enough new supply to compensate for it. In turn, this increases property values of existing homes.

Active Listings:

There are less active listings available for buyers to potentially purchase; this means that there are just as many people (or more) looking to move to Austin and buy (or rent) and there are less options from which to choose. This leads to increased pricing. 

Pending Listings:

There are more pending listings (+10% YoY) with LESS overall listings on the market. This is a STRONG indicator that demand is high. regardless of the cost of living, people continue to move here. There are still many places in the US that are more expensive than Austin with less to offer (in my opinion).

Sold Listings:

The number of Sold listings is around the same. I believe this to be that there are so many off-market transactions happening in Austin now that it is hard to rely on Sold data.

Average Days on Market:

The average days on market decreased by 3 days from 32 to 29 days. This means that it is taking less time to sell more properties, for a higher prices, all while have less inventory. That is pretty crazy to think.