Let's Recap Where We Are In Discussing the Austin Real Estate Market
Posted by Monte Davis on Thursday, August 26th, 2010 at 8:20am.
- This is a buyer's market.
- Austin has twice been dubbed "recession
proof," first by Forbes in 2008 and then by the Brooking's Institute in
June 2010.
- In June, Forbes also labeled the city one of
the nation's "recovery capitals."
- With unemployment at just 7%, we're doing
almost 3% better than the national average, which persistently hangs just under
10%.
- Real estate sales in Texas have been up for the
last three quarters, with April- to-June sales up 14% over the same period in
2009.
The median home price in Texas is $149,200.
That's roughly 15% below the national average, yet property values are just
1.5% off their 2008 peak.
Essentially, Texas didn't just get through the
recession, it got through it without enduring the high volatility that
radically inflated the market in other areas and led to a vicious boom and bust
cycle.
- Property in Texas has retained its value over
the long term in spite of the recession.
Texas finished July with a 7.8 month inventory
of existing homes for sale. There's plenty out there to see -- and buy.
Mortgages rates are hovering around 4.5%, putting affordability at what can
only be termed a record high.
So why the lingering dark mood in so many
economic forecasts? Simple answer: the labor market. Right now millions of
people cannot qualify for a mortgage regardless of the rate level because they
are unemployed.
About 17.5% of Americans surveyed are so
pessimistic about the economy that they believe their income will decline in
the next six months. That belief does not lead someone to run out and take on
mortgage payments.
If you can get past that fear, Austin is a
market where investment buyers can find properties with high appreciation.
Remember, appreciation is caused by demand. You
want to be shopping in areas where there's no vacant land, no pasture or farm
acreage destined to become the next subdivision. You’re looking for “short
supply†durability.
Areas in Austin that have performed well are the
central downtown region with its proximity to the University of Texas and the
lake and then south Austin to northwest Austin. Don't neglect the east side
which has been a hot spot of revitalization in and around Mueller.
Windsor Park to Delwood and on to French Place
is basically the coolest, hippest place in town for young professionals and
first-time buyers. There are lots of good investments there either to
buy-and-hold or to buy-and-flip.
But the key word is buy. It can’t be
repeated enough. This is a good buying climate. This is a solid buyer's market.
Interest rates are sitting at a level that don’t just support buying, they beg
buying.
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