Austin Real Estate Outlook

Recent headlines suggest that home sales could be on the rise in some parts of the country, particularly in the South and Midwest. While analyst are being cautious not to sound too optimistic, the number of pending sales in December was up 6.3 percent according to the National Association of Realtors. This increase was largely credited to falling prices along with lower mortgage rates.

Austin home prices are actually on the rise, according to the most recent housing statistics from Yahoo. The median price for a home in Austin is currently $299,000, a 3.1 percent increase over January. While this may not be good news for bargain hunters, it was a positive sign that the housing market is still doing well in Central Texas.

Zillow shows that overall home values in the Austin area were down 3.6 percent at the end of last year, a sudden change after a steady climb in prices over the last three years. The stock market collapse last fall caused home values across the country to plunge in November and December of 2008. This was also the case in Austin, making the numbers in the local housing market look dire for the first time in years.

In other parts of the country the numbers at the end of last year were much worse. Boston home values were down 9.6 percent, while Santa Barbara, CA values were down 21.5 percent. While the housing crisis has been felt across the nation, the pain has certainly been deeper is some cities.

Lower new home starts and less inventory on the market both contribute to the better numbers in housing markets across the country. A recent Associated Press article noted that pending home sales were up in the South and Midwest, but fell 2-4 percent in other parts of the country. Finding the good news in the economy all depends on where one looks.

The vote this week to give a tax break to home buyers should be good news across the country. The new bill would provide a tax credit of 10 percent of the value of a residence, up to $15,000. This is an increase over the current $7,500 credit, which applied only to first time buyers. This amendment to the economic stimulus package being hammered out in Congress would apply to any home buyer of a primary residence this year. The hope is that this tax incentive will encourage banks to make loans thus stimulating the housing market with new buyers.

According to Senator Isakson, R-GA, who pushed hard for the tax credit, it will help the housing industry and the economy. A statement on Isakson’s website says, “In the mid-1970s, America faced a similar housing crisis when a period of easy credit and loose underwriting flooded the market with new construction. Interest rates rose, the economy slowed and America was left with a three-year supply of vacant homes. Congress responded by passing a $2,000 tax credit for anyone purchasing a new home for their principal residence. Isakson believes the results were clear and swift as home values stabilized, housing inventory dropped and the market recovered.” All of this can only be good news for the Austin housing market.

Austin Real Estate Outlook