The News says the Real Estate Market is a buyer’s market and the foreclosures are coming in waves! Why does Austin not seem to be affected and why is the Austin market so hot right now?
The fact is that the Austin real estate market is very strong, the strongest it has been in at least 2 years. Homes are selling with multiple offers in very short times. The inventory levels are very low. Prices seem to be creeping up, the biggest ceiling we have seen on price increases seems to be coming from the appraiser’s unwillingness to accept that the market is going up. What is causing this? In this blog I will be sharing some recent developments that have occurred over the past few years to create the market we are in now and give my crystal ball (I don’t really have a crystal ball) prediction as to where the market is going.
Over the last few years we have seen our sales volume drop about 60% from 2007 to 2010. In 2011 we saw a slight uptick in the sales volume and for 2012 it seems to be on pace to be off the peak year by 20-30% which means a 20% to 30% increase in volume from 2011!
Why do we have low inventory when all the news says inventory is really high? This is pretty simple to answer. First, Austin has remained fairly strong in our economy. Even at the worst of times we did not go much over 7% unemployment. So sellers were not in a position where they needed to sell. So as the market slowed sellers just decided to either rent their homes or just take them off the market completely. So we saw inventory levels dropping over the last few years along with the buyer activity. This also had an effect on prices. Prices did drop some around Austin and in some areas a lot. Also, builder activity dropped drastically in Austin so fewer homes were being built in the last few years. So now that buyer traffic has picked up and we are seeing lots of competition on homes, seller activity has not picked up at the same volume so we are seeing inventory issues in many of the hotter areas of town.
Where are all these buyers coming from? Over the past few years since the Austin economy has been so good and we are adding jobs, people have been moving here, and in a big way. The population of Austin just keeps growing daily. Many of these people have been renting and now a few things have happened. First, they feel more comfortable with the economy in general. Many of them have had jobs here for a few years. Second, the rents have been going up up up! Homes rent in two days and people are getting tired of trying to find a good rental home. Third, the cost of renting in this city has surpassed the cost of home ownership. It is more expensive to rent the same home in Austin TX that you can buy for less money per month. The end result is a large group of buyers entering the market place.
What is in store for Austin Texas Real Estate over the next 3-10 years? My best crystal ball guess says you missed the best opportunity to buy. However, because you missed the best time does that mean you should also miss the second best time? The answer is no!!! It is time to buy Austin Real Estate. The interest rates are the lowest they have been in years, if not ever. The prices are down from the peak and I do not see any indicators showing there will be another dip in Austin (although there likely will be dips in other parts of the country). I have a feeling that things are only going up from here. Of course, I cannot make any promises, but I practice what I preach… I am buying as much as I can afford to do so. It is the right thing to do. Buy a house to live in, buy investment property, buy a house for your mother-in-law to live in, just buy something and I think in the future you will be glad you did.
For more information on current market conditions in different parts of the city, feel free to call or email me any time. Thanks for stopping by the web site and have a great day!