Austin area home sales are down from a year ago, but prices are holding steady. There are many factors making now a good time to buy: low interest rates, tax incentives for first time buyers and cooperative sellers. As consumers change their spending habits, houses are once again being seen as a long-term purchase of a home and not a quick investment. While the days of the house-buying frenzy are long gone, plenty of serious home buyers remain.
Like the rest of the country, Austin’s real estate market is still lagging behind other areas of growth in the economy. While local economists predict Austin will gradually recover from this recession in 2010, housing isn’t expected to rebound as quickly. Jim Gaines, a research economist with the Real Estate Center at Texas A&M University recently told the Austin-American Statesman that he sees the housing market ending this year with numbers comparable to those in 2002 and 2003. He predicts the Austin area median home price will end the year down somewhere between 1 and 5 percent. Currently the median home price is down one percent from a year ago.
Nationally, home sales have grown at a slow but steady rate since the beginning of the year. According to the Associated Press, sales of previously occupied homes rose by 2.4 percent from April to May, marking the third consecutive increase this year. Foreclosures across the country are bringing out the bargain shoppers and account for about a third of home sales nationally. This has also lowered the national median home price 16.8 percent from where it was a year ago.
Austin certainly has seen a rise in the number of foreclosures over the last eighteen months, but they don’t seem to be affecting home values. Foreclosed properties have dragged home values down significantly in some parts of the country, exacerbating the housing crisis even more. However, Austin area foreclosures represent a relatively small fraction of the supply of homes on the market.
Just like the rest of the news on the economy these days, the housing market falls into the category of “not as bad as expected” rather than actual gains. The Standard & Poor’s/Case-Shiller index measuring home values in 20 major cities is down 18.1 percent, a decline for the third straight month. However, the decline was not a record low and better than analyst expected, according to the Associated Press. In fact, eight of the metro areas in the index posted price gains, including Dallas with the largest increase at 1.7 percent. Overall the index is off nearly 33 percent from the peak in home prices in the spring of 2006.
So, is it a good time to buy a house? All indications are that home prices are fairly stable overall in the Austin area. In fact, analysts like Gaines believe it’s much more likely that prices will creep up rather than take a sudden plunge. That may not be good news for the bargain hunters, but it does mean that buying a home right now is a sound investment.
President Trump isolates North Korea and the issues surrounding the country during his first speech to the United Nations General Assembly.