Many people are aware that a handful of big-city markets, like Manhattan and San Francisco, have largely resisted the real estate slide. It is less widely known that the same thing is true in scores of smaller markets.
“I would call them backcountry cities,” said Robert J. Shiller, an economist at Yale University and an expert on real estate markets. They are just going through normal growth, and they are out of the bubble picture.”
… Austin is a good example of a real estate market that was slow and steady for years and now appears to be taking off. Austin’s high-tech industries are attracting well-heeled buyers from cities where real estate is far more expensive.
New York Times - 2/15/2008
Austin Real Estate Market Trends:
Articles By Roselind Hejl
Austin Real Estate Market:
2nd Quarter 2009
We have analyzed market data for the 2nd quarter of 2009, with a focus on the number of months of inventory for sale in each MLS section.
Below is a comparison between the 1st and 2nd Quarters of 2009. We looked for changes in inventory that indicate a trend in the market. This data is for single family houses, without condos.
Austin as a Whole:
For the Austin area as a whole, the inventory of houses on the market was 6.3 months at end of 2nd Quarter, 2009. By comparison, the inventory was 5.9 months at end of the 1st quarter. So, inventory has grown slightly, but we are still at a medium level. Overall, Austin continues to have a balanced real estate market.
Austin in Parts:
We reviewed 45 different geographic sections in the Austin area:
7 sections had less than 4 months of inventory: Seller’s markets.
18 sections had 4 – 6 months of inventory: Balanced markets.
20 sections had over 7 months of inventory: Buyer’s markets.
The buyer’s market sections were not so overloaded that they brought the whole Austin market into “buyer’s market” range. The overall result for the city was in the balanced range – at 6.3 months of supply.
It is clear from the data that higher priced homes tend to be over supplied in most market areas. Areas with many homes over $800,000 include Central and Northwest Austin, Westlake, Barton Creek, and Lake Travis. These neighborhoods tend to be selected by builders who add to the supply. We expect to see this inventory dropping, since new starts are down. However, during the 2nd Quarter, the number of homes for sale over $800,000 slightly increased. Months of supply for homes over $800,000 are:
1st Quarter 2nd Quarter
Months Supply Months Supply
Area 1B 25.1 28.7
Area 8E 21 21.6
Area 8W 22.1 23.7
Area W 24 25.8
Area LN 34 40.4
Area LS 28.8 38.8
On average, foreclosures are 3.6% of listings on the market – not a significant part of our market. (At the end of the 1st Quarter they were 3.7%, so not much change.) However, some sections of Austin have more foreclosures than this. These include the Manor, Elgin, Bastrop and some Southeast areas. Here you may see foreclosures at 8% to 12% of listings. These areas were popular with first time homebuyers, and were also targeted by investors during the boom market. The good news is that these neighborhoods do not have high inventory levels. This indicates that their foreclosures are being absorbed quickly and inventory is not building up.
In Austin we are not faced with serious depreciation, as a result of prices that were pushed to unsustainable levels.
We are not faced with a serious foreclosure problem, generating its own downward spiral.
And, we are not faced with widespread job loss. We are a city that people are moving to. Forbes ranked Austin #2 in Top Ten Cities for Relocating, citing “the metro area's thriving music, film and fine arts scenes, and it's also about the employers, which include University of Texas, Advanced Micro Devices and Dell.”
The current market still has higher than normal inventory in many popular neighborhoods - where builders were counting on faster absorption. This is true of all price ranges, and is especially noticeable in the higher end.
For buyers it is a great time to come into the market. Interest rates are the best in a lifetime, and they certainly will not remain this low. This is not the time to be waiting around for a better deal. It is the time to start shopping for a great place to live in Austin!