November 2011

Take a look at this graph....

It clearly shows that the Austin home market has turned a corner.

As you know our market started falling off a cliff in 2008.  The rest of the country started well before that and has not really begun to recover, but we have!!!

For six months in a row now, our market has out sold the previous year in terms of houses sold and dollars.  That is a trend. 

Will the trend continue through 2012?

I’m not very good at forecasting, but consider the following:

• Total number of homes for sale in our MLS =   8,240

• Months of inventory available =   4.5  -    6 months is considered equal.  Less is a seller's market, more is buyer's market.

• Interest rates are around 4.25%.  6% is the historical average, so anything under 5% is ridiculous.

• Population growth - Over 50,000 new residents are coming to Austin each year.

• New Construction -  6,500 new homes are built in Austin per year.  Look for this number to jump up for 2012.

• Unemployment Rate in Austin - 6.6% and falling...

• Sales Tax Revenue - Up to 12.2%.  This number has risen in for 20 consecutive months now.

Things are looking healthy for Austin.  We aren’t getting back to 2006 levels anytime soon, but praise God we are better, much better.

And we even got some rain!!

JUNE 2011

You’re about to see a big splash in the Austin media about June Real Estate sales.

Look at the red square for June 2011. That represents the most homes sold in the Austin area since August 2007. That’s 46 Months ago!! And, they sold for more money too. July will probably as good. Great news, but one month doesn’t make a trend.   Three months of good news and a good rain will make me feel better.

MORE GOOD NEWS:

·         Over 50,000 people will move into the Austin area this year

·         Only 5,000 new homes will be built this year

·         Apartments are full

·         Homes to rent are scarce

·         The number of homes for sale is moderate

So where are all these yaks going to live?

Check out the website. www.BlackburnRE.com

John Blackburn     Broker, Blackburn Properties    512 431 8428

Interest Rates

Edition 3              March 2011

Interest Rates

Interest rates for home mortgages have started their climb back up. Today in the Austin area a new mortgage will be over 5% probably closer to 5.25%. That is still historically low but compared to the 4.5% we have been looking at for a long time it feels high.

So cheap money is fading away and with it purchasing power.

$100k loan

4.5% interest - $506.00 monthly payment of principal and interest

5.25% interest - $552.00 monthly payment of principal and interest

So if $506 is your budget, now all you can borrow is:  $91,750

Your purchasing power went down by:  $8,250

But this is a lesson for the next time interest rates go down. Strangely the number of homes sold is going up and the average price is also going up.

 I’m feeling better about our real estate market!

Check out the website. www.BlackburnRE.com

John Blackburn

Broker, Blackburn Properties

512 431 8428



January 2011

Edition 2              January 2011

Thank you very much 2010, but we’re ready to move on. But first a look back:

Austin Area historical sales:

The number of houses sold in the Austin has been relatively flat for the last three years. I think this says we have been at the bottom of the market for quite some time. Look for one more year of slow going.

What about the dollars????

The average home sales price increased by over 4% from 2010. That’s good, but does it say we had a 4% appreciation in home values last year? No. In the first half of the year homes at and under $225K were the hot ticket in town. Second half it was the $300K to $500K houses. The low average price in 2006 was also a very large percentage of lower priced homes selling in a very hot market. Fun with numbers!

So what’s ahead?

Rising interest rates, but who cares? Historically low interest rates last year didn’t help. The issue here may have shifted away from the interest rate and to the lending criteria. Credit score, Income, Debt, Down payment amount, Cash on hand to close, and a variety of new requirements that seem to pop up from nowhere.

We can expect to see FLAT inventory, number of homes sold, new construction starts, foreclosures, number of lots to build on, and probably prices for the next year. Isn’t that exciting???

We can expect to see an improving job market in the private sector especially in the high tech and health care sectors of Austin and those jobs pay better. But layoffs in State and local (School) governments could counter the private jobs increase.. More important than the number of new jobs is they are expected to be high paying jobs and those people with jobs expect to see pay increases. When working folks get pay raises consumer confidence will raise and boom, off we go. We will see extended population growth which will put a strain on housing demand. Hopefully we will see people acting on a tremendous amount of pent up demand. If prices remain stable they will remain affordable. The average wage earner in Austin generates over $47K per year. Two income families can afford a nice house in Austin. Not so in many other parts of the world.

What are the threats to either a growing or stable Austin housing market?

What if underwriting criteria gets tougher?        BOOM!

What if Developers and Builders can get money to operate on?

What if consumer confidence takes a dive?        CRASH!

What if foreclosures accelerate?                              POW!

What if State and Local governments stop spending and have huge layoffs?                       KaBOOM!

So, it’s still a perfect time to buy. Forever real estate has been tied to jobs, interest rates, and inventory. I think we can throw interest rates out of the equation and insert lending criteria. Jobs can be altered to higher paying jobs.

Check out the website. www.BlackburnRE.com

John Blackburn

Broker, Blackburn Properties

512 431 8428