Comments on: Austin Real Estate Market – May 2008 Update

By: Michael @ The Stage Coach

Michael @ The Stage Coach — Tue, 01 Jul 2008 14:12:14 +0000

Hey, Steve:
You have the best grasp of local stats (butter), and I have been meaning to ask: when calculating the Days on Market, is it from Listing Date to Contract Date? Listing Date to closing Date? Or some thing else entirely?
And then how does the number track into the next month if the deal falls through, say the first week of the next month? Does it just go back to houses for sale?
Michael

By: scott

scott — Mon, 30 Jun 2008 14:21:58 +0000

I think that the Austin metro has problems supplying first-time homebuyers as much per its lack of condo developments in the outlying areas. As the area grew massively in the outskirts, the developers favored mega-apartment complexes over condos.
TH’s and condos, and I’m speaking of the affordable ones for the masses, not the handful of upscale DT developments, have been a major sepping point for first-time homehowners…Austin simply is greatly lacking in a large mass of starter condos/TH’s, and seems to have preferred the massive upscale aprt complexes
to the same. During the same time, land got scarce, much as bought up, and little was left for starter homes……that left the suburban outposts to carry that weight…with the price of gas, it will be difficult, doubly so, for young couples and singles to find a reasonable perch to grab onto per home/condo/TH ownership, and may be stuck for a long time in the luxury aprt. guilded ghettos……

By: brett

brett — Mon, 30 Jun 2008 03:30:24 +0000

hi steve,
the average prices of sold homes is going up because the lower end of the market is the weakest as u can see in your numbers… we are definitely seeing a larger impact among first-time homeowners and families with average incomes..the higher end homes are the ones that are pulling the average prices up…fewer cheap homes are being sold, while homes in higher brackets are seeing smaller drops

plus, i belive the numbers are sort of misleading because the market in the city of austin is much different than in kyle, round rock or manor…it’d be interesting to see breakdown of the different cities and see how they behave individually because the cheaper homes are in the suburbs…i would think the prices in the city of austin are much higher and stable

thankS

By: lindsey

lindsey — Sat, 28 Jun 2008 18:03:08 +0000

My house has gone down in value over the last two years, but my taxes have gone up substantially. I would not be paying this much in state income tax (the old rebuttal I really don’t buy), I’m single and I don’t have children. One year I was ill and couldn’t work, and my house taxes kept going up. I think that Austin’s citizens would be albe to get much more ahead, buy, fix and sell, much more agilely, if it wasn’t for these taxes. These taxes (even though the bill passed to supposedly lower them) are supposed to go for our schools, but our teaches are paid obscenely lower than most other states and the schools are in trouble. I don’t believe the taxes are accountably going to the stated end point. This system seems to penalize the citizens of Austin, especially as they approach retirerment, and then, it doesn’t seem to truly serve the school system. It appears very disappointing and rather abusive.
I think if folks stood up, with the real estate community, and helped provide a solution (I like to think of solutions not just criticisms), that would truly ram up the local market more than any of the economic global woes. Austonians, realtors, and the city would all benefit.
I am just a regular schmoe, but that’s my now less than it used to be, two cents.

By: Steve Crossland

Steve Crossland — Thu, 26 Jun 2008 16:05:46 +0000

Jay: Number of sales is down 24%. Prices are still rising. So it depends on what you mean by a market being “down”.

Brett: I’m with you. Some of these newer style duplex/condo structures going up as infill seem uninviting to me as a home owner. Especially what you describe where the front yard is the back yard of someone elses house.

Barry: Interest rates in the 7s’ or 8′s would be normal, historically. We’re all spoiled with the low interest rates of recent years. It use to be anything under 8% was great.

Shireen: good luck on your listing. Monitor the traffic well and seek feedback (your agent should) from every showing. Also, for some reason, we have been getting more people through our listings with open houses than MLS showings. Two of our listings sold in the past few months to open house attendees. That’s not normal, but we do whatever works to get people through the door. When I sold our own home in December, we dropped the price $25K, twice, had 2 MLS showings in 30 days but 7 to 12 people each week for open houses. That one sold to an open house attendee also.

Steve

By: Jay

Jay — Thu, 26 Jun 2008 15:44:38 +0000

So is the Austin area market down 24% as a whole?

By: brett

brett — Thu, 26 Jun 2008 01:07:37 +0000

i definitely agree about the whole central austin housing boom. i do not understand who is buying all these properties; when i walk along enfield with my dog, i usually pay attention to all the homes for sale, and the prices sorta scare me. for example, another older home was destroyed, and an investor is finishing two units within the same lot (only one unit faces the street, the second unit faces the back of the first home)…each home is being sold for nearly 1 million dollars..i smell future problems for this area..i wonder if any realtors agree

By: Barry

Barry — Wed, 25 Jun 2008 12:00:21 +0000

….And the fed is going to start raising interest rates to stem inflation before the end of the year which will mean mortgages in the 7s and 8s.

By: seen this before

seen this before — Wed, 25 Jun 2008 02:18:28 +0000

well this is the same old story in a different location… the lower end gets killed while the middle market hangs in and you get a bump in average prices for a couple / few months. In other areas of the country this exact occurrence is what signaled that there was more trouble ahead.

Speaking of Tarrytown; and really all of west central Austin; prices have gone though the roof here in 3 short years. I’m not sure who is buying 1500 square feet on 0.15 acres for $500K but it surely isn’t sustainable. On top of that rents are , from what I can tell, basically flat over the same period, as is wage growth. ( Austin median family income in 2007 is down from 2000 per the A&M real estate center, but still the best paying city in the state)

So according to austinhomesearch.com there are 136 “homes” for sale in “central Austin” priced above $750,000 and only 11 are currently “pending” . The fall and winter should be interesting.

By: Brett

Brett — Tue, 24 Jun 2008 20:40:57 +0000

Hi Steve,

As you clearly mentioned, starter homes are not available in the market anymore. There are not enough to support that market, which translates into middle-class families not being able to upgrade and to buy a first home, and having to rent.

I can only talk about my area (Tarrytown), and the value of homes has skyrocketed over the past couple of years because of investors pushing the prices up. For example, an older home was destroyed near my home, and a new ‘townhome’ community is being developed with 2 and 3 story units of 1200 – 1400 sqft with prices starting at 520k, which to me is ridiculous taking into account what the prices of homes was a couple of years ago. A lot of investors are doing similar things in this area with older apartment complexes being turned into ‘condos’ with prices in the 250-300 USD/sq ft range.

I am either living in another world, but I don’t see how there can be so many people being able to afford properties that are worth so much with Texas salaries.

By: shireen

shireen — Tue, 24 Jun 2008 14:12:30 +0000

everything seems to have slowed! I saw this coming but couldn’t get my central Austin house on the market any faster — it is cleaned out and professionally staged and is getting showings. We are looking in NW Austin (inside 360) and a house we are very interested in, is getting dozens of showings — but it is still on the market, everyone loves it but the sellers won’t take a contingent and everyone who is interested has a house to sell. It feels like a slow-motion car crash, interest rates are risings, prices are sticky but I fear that a brick wall is near!