Austin Real Estate Market Trends:
Articles By Roselind Hejl

The Case-Shiller Index of housing prices has received a lot of attention lately. It uses the closest comparable – a sale and resale of the same house – to give an indication of changes in value. The index has tracked repeat sales prices since the year 2000. An interactive map showing the changes in home values in the 20 cities monitored by the index is posted on the New York Times website. The graph shows that there are big differences in the magnitude of price increases and declines in the various cities.

Austin is not one of the 20 areas covered by this index. If Austin were included, it would be apparent that there was not a spike in prices in recent years, with a mirrored reduction in prices. We know that Austin experienced a 2% increase in overall median price in 2008, compared with 2007.

It is said that real estate markets are very local, and we are seeing this in the current real estate market in Austin. While the median price has held steady, it is clear that many homes on the market have had some price reductions. The degree of re-pricing varies widely from neighborhood to neighborhood. Re-pricing is in direct relation to the number of homes for sale in the local area.

There are some areas and some price ranges where the inventory exceeds demand. Inventory reduction in these neighborhoods is a welcome improvement. The combination of steady sales and little inventory coming on the market will create a balanced market over the next year.

On the other hand, there are some areas where inventory was always tight, even in 2006. In these areas, the decline in inventory has brought levels very low. An example is the Canyon Vista Middle School area. This area has only 3.8 months of supply on the market in the $300,000-600,000 range. This is clearly a seller’s market. It seems odd to say “Seller’s Market” today. But, those are the facts.

In Austin, the total number of sales in 2008 decreased by about 20%, compared with the number of sales in 2007. Builders have stopped supplying homes. Sellers have also done their part in reducing inventory. Many homeowners have pulled homes off the market. The result is that there are significant variations in the amount of inventory available in the neighborhoods of Austin. Each area should be considered in its own right.

We are also seeing a rise in demand by buyers for Austin real estate. The combination of low rates and reduced prices make buying a home very attractive right now. Buyers do not want to let this opportunity slip by - because it will not last long.