The sour real estate market hit Austin later than the rest of the country. There is widespread agreement that our slowdown with be shorter and much milder than that experienced in the harder hit areas of the U.S. My personal prediction for Austin is that we will see an overall slide of 3% to 5% in average values, but that more than half of our MLS areas will see zero decrease or a small increase in values. I think the market will pick up by mid summer, or end of year at the latest.
My guess is not based on a formula or any formal calculation or spreadsheet analysis. It’s simply a gut feeling, or an educated guess, based on what I see and hear in the field, and on how our own business is doing. So take it for what it’s worth.
Moody’s Economy.com has a prediction of it’s own though, based I’m sure on a more formal analytical process. This below is from the Real Estate Center at Texas a&M newsletter.
HOUSING’S PRICE DECLINE PREDICTIONS
A new report from Moody’s Economy.com and Fiserve Lending Solutions predicts when Texas home price declines will bottom out and what the peak-to-bottom price drop will look like.
Most major Texas cities went into the home market downturn later than many throughout the country and will level off ahead of the U.S. average, according to the report’s analysts.
Houston has one of the smallest expected home price declines in the country at 0.2 percent. Analysts expect the city’s home price decline to bottom out in third quarter 2009.
Austin’s peak to bottom home price is expected to fall by 1.3 percent, hitting bottom in fourth quarter 2009.
Dallas–Fort Worth’s price decline will come to 1.1 percent and bottom out in third quarter 2009.
The report predicts San Antonio will experience the largest decrease in the state with a 1.6 percent decline, but it will bottom out in first quarter 2010.
The overall U.S. market could see a price drop of 36.2 percent and bottom out in the fourth quarter of this year.Moody
Wow, a 1.3% drop for Austin, according to Moody’s. So, if you could buy a home at 5% to 10% below current market value, and then its value fell even the 3% to 5% I am predicting instead of Moody’s 1.3%, would you have bought “at the wrong time”? No, you would have bought at the right time, if you agree with me that the “right time” is when you are ready and able, not when the headlines start looking more sunny.
Of course the kicker is job security. Even a ready, willing and able buyer should decide how secure their income is before making a purchase that would cause problems if they lose their job.