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PostHeaderIcon State of the Austin Market

Today’s post is brought to you by our guest blogger, Anne Haikola of Violet Crown Realty.

********************

Dear OffAssist blog readers,

Everywhere I go someone inevitably asks me “How is the real estate market in Austin?”

This guest blog post is an opportunity for me to give everyone a proper, detailed answer, complete with supporting data and charts, so here goes…

The unfortunate truth is that media coverage of the real estate/mortgage mess, particularly in 2008, has really done a number on consumer confidence. Many people are taking a, “wait and see,” attitude towards real estate purchases.

Below is a chart of closings on a month by month basis for the past 5 years. You can see that this year is not as awful as the media makes it out to be; 2008 is tracking with 2004.


However, compared to recent years sales in the Austin market are definitely off for 2008.

Home inventories in Austin are up and I have provided you with a summary of what that looks like in our various MLS areas.
As a frame of reference, real estate industry standards say that the transition from a seller’s market to a buyer’s market take place when an area has a 6 month or greater available inventory. The Austin MLS area-wide inventory is just a little over 6 months – which means we are leaning toward a buyer’s market.
However, when you look at some of the more popular Austin areas, the months of inventory range from 2.62 to 17.2 months. Keep in mind that the data is skewed by neighborhoods with $ 1 Million plus homes, which always take a long time to sell.

The areas with more affordable housing – with average prices less than $200,000– tend to have smaller months of inventories. The inventory in some of the “pricier” areas is growing; as a result, average prices are sliding (buyer’s market).

Austin MLS Area Map

Consider Area 1B: This are contains some old, established neighborhoods like Tarrytown, Pemberton, Brykerwoods, and Clarksville. If you’ve always wanted to live in one of these neighborhoods, now is a good time to look, especially if you have good equity in your current home. With a 10 month inventory of homes, there will be better opportunities for price negotiation.

Of course you have to be in the market for at least an average home in the area – which is around the $575,000 price point. The theory with “laddering-up” is that you might take a hit when you sell in a down market, but if you upgrade you are likely to get more for your money.

On the other end of the spectrum, people with a home to sell in MLS areas N or 10S should be able to sell their home quickly and close to asking price. I say that assuming that a seller in these areas is planning to work with a qualified real estate professional (me!) to prepare and market the home to its best advantage. I am also asuming that the asking price is in line with average home prices for the area.

What else can I tell you about the Austin market? Well, actually, a lot. If you have questions about a particular part of town or property values, please just give me a call and I’ll be happy to discuss your specific questions or concerns. I am constantly looking at the market data and studying the inventory and can easily provide you with a more focused analysis.

In closing, I would like to say that other national real estate markets are fairing far worse than Austin. Some states and cities will probably sustain a much longer term depression in prices. As long as Austin remains affordable folks will continue to migrate this way.

There is a feeling among local real estate professionals that the bottom is probably behind us. We anticipate sales picking back up and a surge in the Spring, based on historical trends, from seasonal need and a pent up demand from those that want to wait and see, but really need to move.

Personally, I believe that this market presents one of the best opportunities to buy a home in the Austin area in quite some time. I think now if the time for investors to scope out rental properties and homeowners should feel privileged to have been able to enter the market at such a good time. Please do not sit to wait for prices to plummet and miss the already closing window we have for good deals in the market. Once Spring rolls around, those that are waiting may realize it is too late.

Thanks for taking the time to read my post. I hope you find the information in it helpful.

Anne Haikola

By the way, if you or someone you know needs a great realtor to represent them, feel free to contact me at Anne@VioletCrownRealty.com.

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