Austin Texas Real Estate Market Update: Rebound in 2009
The buying season heated up in Central Texas in May according to the Austin Board of REALTORS® Multiple Listing Service (MLS) May 2008 sales report. Single-family home sales in May are up slightly over April 2008 numbers, when 1,981, homes sold. Homes are spending fewer days on the market and overall, the real estate market continues to reflect conditions similar to those of 2005, before the unusual boom in 2006.
Take a look at May single family sales statistics compared to 2007:
|
Date |
Homes Sold |
Median Sales Price |
Dollar Volume |
|
May 2008 |
2,154 |
$196,120 |
$566,827,254 |
|
May 2007 |
2,679 |
$183,160 |
$671,716,386 |
No matter which city you live in, inventory is still high. Still, Texas is fairing better than the rest of the nation. Austin’s current home inventory is below.
AUSTIN REAL ESTATE MARKET FORECAST- Mid Year Update 2008
The Austin Home Builder Association (HBA) held their semi-annual market update last week. Their research shows that the market is slated to remain low through Third Quarter 2008, then pick up by Winter 2008 or early 2009. Mark Sprague with Vesta Strategies thought buyers and sellers should be relieved to see a "cleansing of the market", which was overheated by real estate speculators.
Great areas to buy include the Southtown area in South Austin, but also other areas such as Round Rock, Pflugerville and Kyle due to coming Seton Hospital complexes and other large mixed-use developments.
Read Also: Austin real estate is a great buy for boomers and empty nesters.
“Despite economic conditions across the nation, Austin continues to have a relatively low unemployment rate and cost of living index,” said ABoR Chairman Socar Chatmon-Thomas. “While we’re not enjoying the booming real estate markets of 2006 and 2007, we have seen steady increases in sales volume since January 2008 when 1,321 homes sold.”
That said, remember that Dell is laying off 900 Jobs in 2009.
Single-family home sales in May 2008 reached their highest point in eight months, totaling 2,154 and contributing $566,827,254 to the local economy. The median price for single-family properties was $196,120 while active listings increased to 10,577. Market times averaged a total of 64 days on the market.
The good news for Austin real estate buyers: now is a great time to buy Central Texas and Austin real estate. Interest rates continue to be low and the increased number of foreclosures helps keeps prices reasonable.
Read Also:Stop Timing the Market and BUY!
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Tags: austin home builders, Austin Real Estate News, central texas, market update, sales statistics
June 28th, 2008 at 7:55 am
I am surprised that house prices have not dropped compared with May 2007 in a oversupply situation. I hope your prognosis that the market will improve later in the year although I feel that is optimistic in view of the state of the economy.
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June 30th, 2008 at 8:49 am
I think Austin is holding up better then 98% of the nation. With inventories on the rise more then likely prices will stay level. In Tucson AZ were seeing that prices seem to be bottoming after falling more then 30% in some areas.
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July 2nd, 2008 at 6:26 am
These forcasts are simply a joke. Ever forcast has shown things getting better right over the horizon, and not a single one has proven correct. Right now, most Austin home owners should wish and hope that home prices stay level for the next few years. Even if prices drop in Austin, the drop is likely to be much smaller than say, California or Florida.
I know in my area of Austin, I think its likely that prices will drop by 5-10%, possibly more if mortgage rates get back to ~8% range.
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July 9th, 2008 at 4:57 am
Wow! I wander out of my local online neighborhood (southern California) and see what type of killer real estate deals can be had in new destination towns like Austin. $196k doesn’t get you much more than a parking space around my neighborhood (I’m obviously doing something wrong in my RE portfolio). And here I was thinking Austin was some bohemian place only good for starving musicians who couldn’t make it in L.A.
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July 9th, 2008 at 5:13 am
Shane: Thanks for the comment! Austin is actually a very great place and we top the “best places to live” lists because of our green spaces, unique atmosphere, and affordability. Thank you for thinking differently on that.
Anon: I agree that forecasts are forecasts. They only look at the past trends to predict the future. The main thing Mark mentioned is that all indexes across all areas that he evaluated saw Texas and Austin among the “safer” bets. Banks and other institutions know that we’re in great shape due to real factors, such as job growth, economy, and other measurables.
Property Editor: I think the market will be in better shape next year. The only thing holding our market back is the ability to get loans, which resulted in higher inventory. People want to buy, but stated income and investor loans are tough to come by. Families and good credit home buyers are having the time of their lives.
Mike: come to Austin!
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July 9th, 2008 at 11:02 am
Dee, in response to your response to Property Editor: Your statement that the Austin market is declining due to the tightening of lending standards SHOULD make you think twice about your forecast that the Austin market will get better in 2009. The honest experts (not NAR) in the mortgage and banking businesses anticipate the credit crunch getting WORSE in 2009. The Subprime fiasco is going to look like a day at the park compared to the Pay Option Arm and Liar Loan crisis that is just beginning. The default rates on those loans are just as high as the subprime default rates, but there are twice as many loans at twice the lending amounts. So what does that mean to EVERYONE (including Austin)? Lenders are going to have even less money to loan, so they are going to require higher credit scores and higher down payments. That means there will be even FEWER buyers, MORE inventory, and thus GREATER downward pressure on housing prices.
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July 9th, 2008 at 11:50 am
Wow! I appreciate you chiming in because I’ve been hearing differently. The info I had is from Mark Sprague at Residential Stratedies. They are an independent firm who isn’t associated with NAR or others.
I’m still hopeful that lenders will be more solid Q2 and Q3 next year. If not, you’re absolutely right on repercussions. That said, I really am glad to live in Austin.seriously.
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July 10th, 2008 at 8:04 am
Dee, I think everyone still wants to be optimistic and hope that things are turning around (especially the Fed). However, the information coming from insiders in the I-banking and Mortgage lending world is that virtually all of the banks are in serious trouble…especially Freddie Mac and Fannie Mae (http://www.bloomberg.com/apps/news?pid=20601087&sid=as4DEc5UFopA&refer=home). And we all know how important those two are to keeping the mortgage market afloat. Here are some charts posted on the Fed’s site that can show you the progression of defaults.
http://www.newyorkfed.org/regional/subprime.html
–Note the Fed is getting their head above water enough to begin figuring out the Alt-A mess that’s just starting. The majority of those resets don’t happen until 2009.
http://www.newyorkfed.org/mortgagemaps/
–Compare the April 2008 Alt-A default rates to the April 2006 Subprime default rates. Alt-A is pretty much on the same path. Scary!
http://www.youtube.com/watch?v=pmeBSWI9sF8
–If you just want to see an overview of the data from a fairly entertaining source.
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July 15th, 2008 at 6:56 am
I have been looking into Austin for a while but don’t want to miss the boat, however I am about 4 months from buying something there with a 1031 exchange. Hopefully there will be some available deals out there. I have also heard good things on Pflugerville.
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August 24th, 2008 at 11:22 am
I enjoy following your blog! The real estate market is slow in Bend Oregon. It looks like a good time to buy in your area. I was born in Amarillo and moved to Oregon in 1962.
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