Comments on: September Austin home sales drop 22 percent

By: Observer

Observer — Mon, 22 Oct 2007 14:51:39 +0000

> I think a “bubble”, in it’s purest definition, is an inflation of something with air. A balloon is the most iconic image, and also the popping of a balloon.

I heard the other definition:

“You can’t go anywhere without hearing people talk about “the real estate bubble.” Such talk drives me to distraction, and I’ll tell you why. It’s because there is no real estate bubble. Bubbles are for bathtubs.” (c) Kendra Todd

Kendra Todd is the first and only woman to win Donald Trump’s smash hit NBC show, “The Apprentice” on NBC. Additionally, she is Broker of Florida-based The Kendra Todd Group, host of the popular HGTV Show “My House Is Worth What?” and a regular real estate contributor on Fox News Live. Her first book “Risk and Grow Rich: How to Make Millions in Real Estate” has been an instant success.

By: Steve Crossland

Steve Crossland — Sun, 21 Oct 2007 18:20:32 +0000

I’m working on YTD stats this morning. I haven’t got to the specific area breakdowns yet, but the stats continue to send mixed signals.

Here is a quick preview for September Sales numbers:
Number sold is down 25% (excludes condos, townhomes, etc. – houses only)
Average Sold price up 11%
Median Sold Price up 8.9%
Average days on market up 1.7% to 59 (which is still very good)
Median days on market up 5.4% to 39 (also very good)

YTD numbers are not as good, but still good. The market is slower though, we can feel it, yet the overall stats still look great with the exception of number of homes sold, which should eventually hurt the other numbers but hasn’t done so yet.

Steve

By: no bubble

no bubble — Sun, 21 Oct 2007 17:53:15 +0000

“The medain home price in Austin is still $185,000. In other words, there is no inflated price ceiling from which Austin has to fall.”

Thats cuz they are cranking out $140,00 houses out east like crazy.

the livable parts in austin cost considerably more then $185,000. The livable parts of austin have doubled ( or more) in the last 8 -10 years. a pull back makes good sense to me.

A bubble? Nah.

by the way what is the mean (average) price in austin ? isn’t it considerably higher?

PS – I enjoy the blog very much!

By: Mike B

Mike B — Sun, 21 Oct 2007 16:27:14 +0000

If we truly have a bubble or not in parts of Austin depends on how many buyers were stretching to buy homes using teaser rate loans and the like (IO/negam/etc) with little money down. Personally, I don’t think it was all that many, but I have no hard facts to back that up.

The people who were stretching into these loans may have problems refinancing when the time comes and may not be able to afford their houses on a traditional fixed loan. This does two things: it creates more inventory when they people sell or potentially foreclose, and it takes away demand since the people who were using these loan products are no longer candidates to buy at the current price level now that the availability of these loan products has diminished.

By: Steve Crossland

Steve Crossland — Sun, 21 Oct 2007 15:51:42 +0000

I think a “buuble”, in it’s purest definition, is an inflation of something with air. A balloon is the most iconic image, and also the popping of a balloon.

The “air” as related to the real estate market is the inflation of prices such that they bacome disconnected with the common underlying foundations that justify price increases, such as job growth, supply and demand, etc.

Austin has not seen price inflation such as the “bubble” type appreciation of Florida, California, Nevada, Arizona where speculation and easy access to loans (plus a good amount of old fashoin fervor) drove prices up to amounts that are disconnected from the local economic fundamentals.

Steve

By: ARZ

ARZ — Sun, 21 Oct 2007 07:13:45 +0000

How do you define bubble? Things becoming too expensive and they are obviously over valued? If that’s the case, I can’t wait to jump in when things to “crash”. Say some 2000 sq. ft. houses used to be selling at 500k in Westlake or 750k at Rollingwood? If they crash, drop their value to half, I am there…

Of course it’s never gonna happen.

By: will

will — Sat, 20 Oct 2007 23:19:12 +0000

to chime in with Mike B above, could south austin be be considered a bubble candidate? Ive heard anecdotal comments of over 30% appreciation within the last 6-8 months in travis/bouldin.

By: Mike B

Mike B — Sat, 20 Oct 2007 00:59:43 +0000

The scary thing is that the Austin market can still drop even though there was no bubble — although I do think we have a bit of a bubble in some parts of central and close in south Austin. The burbs in most Texas cities are so well supplied with new construction, that an economic slowdown can still crash prices around here even without an appreciation bubble which will make it even harder on local owners since they don’t have an “equity cushion” like their coastal brethren.