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
