Former Boom Markets Hit Hardest

by Steve Crossland, REALTOR in Austin TX on December 27, 2007 · 5 comments

Austin was not a “boom market”, but the sentiments and national news resulting from the markets listed in the news snippet below have contributed to a somewhat timid buyer pool in Austin at present. Hopefully, buyers will perk up this spring as the mortgage fallout further clears up and people realize that Austin is not in any way a bubble poised to pop.

The Standard & Poor’s/Case-Shiller Home Price Index, released Wednesday, says the median resale home price in 20 key markets declined 6.1 percent during the 12 months ending in October.

The index shows price drops ranging between 10.6 percent and 12.4 percent in Phoenix, Las Vegas, San Diego, Tampa, and Miami. Additionally, existing-home prices were down 11.2 percent in Detroit and 7 percent in Washington, D.C., with the smallest declines of 0.7 percent and 0.1 percent recorded in Atlanta and Dallas, respectively.

This was the largest decrease in the index in its six-year history and what Michael Larson, housing analyst for Jupiter, Fla.-based Weiss Research, calls “one of the worst months we’ve had yet.”

Among the 20 cities, prices rose in only three — Charlotte, N.C.; Portland, Ore.; and Seattle.

{ 5 comments… read them below or add one }

1 Barry December 30, 2007 at 7:33 am

The company I work for moved ten people from Vegas and Phoenix to Austin when we relocated a company. Everyone seems to be much happier with Austin than with their previous cities, however no one has bought property in Austin after 8 months because they cannot sell or rent their homes. However, they are renters here and at least two of them are renting homes, not just apartments. One is even renting a condo downtown. We might find that bad news in these other markets may affect overall real estate prices here in Austin as well, but we may see rents come up.

2 arz December 31, 2007 at 8:33 pm

My boss has tried to make me move from Austin to DC area for several years now. In fact, he wants to close down the Austin office and move everyone there. But no one budged. Even with the current “bust” there, I still can’t afford a decent house in around NOVA or south MD area. Even with 6% drop in selling price there, the average home in decent suburbs are still 700k and up. Everyone over there is a virtual millionaire even if they just own a condo. No wonder the dollor has to drop its value significantly. The world just don’t have enough room for so many rich people…

3 Steve Crossland January 1, 2008 at 9:29 am

> The company I work for moved ten people from Vegas and Phoenix to Austin … however no one has bought property in Austin after 8 months because they cannot sell or rent their homes.

Antecdotal stories like your are abound. We also see a lot of buyers who are deciding to wait for no reason other than they fear “it’s not a good time”. As Realtors, all we can do is have a conversation about it and try to point out the folly of “timing” a market and that Austin isn’t in a bubble, but ultimately I think the negative media is winning the battle.

Steve

4 scott January 3, 2008 at 12:32 pm

Perhaps the much higher bar for first time homebuyers per lending requirements might have as large, if not larger,
an impact as any negative national press.

5 Tony Tovar January 2, 2009 at 1:04 am

Hey there,

I’m with you on this one. It would seem that the markets who might have the most difficult are the ones that have boomed tremendously in the recent past. Texas in general has always been semi stable and I think Austin is no exception. However, you do here and there that the prices in Austin are getting a little ridiculous.

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