Last sunday the Austin Statesman had a series of real estate articles summarizing the past year in Austin real estate. The main article led off with a sub-headline “Hutto is Hot!”. Upon what data or information did the author form this conclusion? The assertion was made based on the fact that the number of residential sales in Hutto in 2006 increased 60% over 2005 – more than any other area of Austin.
Should the increase in number of sales be the sole determinant of what constitutes a “Hot!” area? No, it shouldn’t. This is another example of why it’s foolish to trust on face value the writings and proclamations of newspaper and magazine journalists writing about real estate. Most of them, in my opinion, write a lot of garbage because they don’t know how to interpret the data they are writing about.
So what does make an area “hot”?
To me, an area is hot if it has a combination of short supply and rising prices. An area is hot if some or most of the homes in the area are selling so fast that buyers are having a hard time getting an offer accepted before someone else beats them to it. Homes in hot areas often receive multiple offers and sell at or above list price quickly. This of course generates market conditions that result in rising home prices in the hot area. And finally, there has to be a sufficient number of sales for the data to be meaningful. Has this happened in Hutto? No.