Comments on: Austin Real Estate Market Update – November 2007

By: Jim

Jim — Fri, 28 Dec 2007 18:31:44 +0000

Even last year when I ran market stats for myself, I saw decreased sales volume if I excluded all the outlaying areas like Manor, Hutto, Kyle, etc. The core Austin market (without RR and Pflugerville) has had a falling volume for a while, which is why prices are going up. If anyone tried to buy a decent condo or townhouse in central Austin recently will see that there’s almost nothing good out there for under $250k – $300k. I imagine it’s similar in other desirable areas.

The outskirts have never been a desirable market anyway, and the only thing that sustained the volume there in the past were cheap loans to desperate poor people who had no business owning a home. Now the loan market for them has shut down, so those houses out there are experiencing a downturn as well.

By: Steve Crossland

Steve Crossland — Thu, 27 Dec 2007 22:36:48 +0000

> In the first paragraph, I think you typo-ed the average price per square foot.
Yes, thanks for cathing that. I fixed it.
Steve

By: Julia

Julia — Thu, 27 Dec 2007 21:00:36 +0000

In the first paragraph, I think you typo-ed the average price per square foot. I think it’s actually $119 not $199. (Looking at your charts, anyway.) I really enjoy all this local information, even though I’m not shopping for or selling real estate. It’s too bad the new MLS system has less data than the previous one. I would think median numbers would be pretty useful to know!!

Thanks for writing these informative articles!

By: Steve Crossland

Steve Crossland — Thu, 27 Dec 2007 14:54:50 +0000

Hi arz,

At the risk of sounding like a rah rah Realtor trying to spread sunshine, I honestly don’t see Austin following that trend. I’m expecting things to pick up again in the spring. All of our economic indicators are solid. Unemployment is low, job growth is good, and we are less oversold to investors than many of the areas you mention.

And remember, many of those areas had 5 years of appreciation for people to get sucked into. Austin was flat on prices from mid 2001 through the end of 2005. It was only from early 2006 through about the middle of 2007 that we saw strong price appreciation, and that appreciation wasn’t astronomical, but was a health 10% give or take, depending on the area of Austin we look at.

So I don’t think we share the same set of factors that are causing other areas to drop in prices. We have not attained an artificially high average price point from which to fall. I think we’ll continue to see “two markets”, in which many homes fail to sell, but the ones that do sell enjoy relatively strong demand and sell for good prices.

The outlying areas (Hutto, Manor, Kyle, Buda, etc.) may be different though, so I mainly speak from an Austin-proper viewpoint.

Steve

By: arz

arz — Thu, 27 Dec 2007 08:18:31 +0000

if you look at the data of those markets that currently got hit hard, you will find similar patterns. House prices keep steady and even move up a notch while things get worse. The panicky mode has not yet sink in. It takes another 3-5 months before things really get ugly. I don’t know if Austin can hang on for how much longer, but if the national trend is also true here, we will see price slipping in this spirng/summer. That would be sad for those who purchased their home in the last couple of summers. Let’s hope it won’t happen.

By: Scott

Scott — Thu, 27 Dec 2007 05:37:02 +0000

Steve

Thanks again for providing thoughtfully analyzed and well organized data. Am I correctly assuming that the reduction in sales is a direct result of the loss of loans from lenders participating in the sub-prime lending dibacle?

Scott