The Austin Real Estate Market-2008 Recap

It's obvious that 2008 was a tough year for real estate, both on the national and the local level. However, Austin didn't suffer NEARLY as much as the vast majority of markets in the U.S. This is a function of several factors. Austin real estate did not see the HUGE jumps in value that most U.S. markets did over the past several years, so values here did not need nearly as large a 'correction'. Also, the local Austin economy has been fairly consistent (if not strong) and growth is expected in the near future...Austin has averaged 3% population growth per year since 2000, which works out to about 40,000 new residents in 2009, according the Austin Chamber of Commerce. The median home price in Austin in 2008 was $183,700 (according to the Austin Chamber of Commerce), a MIND-BLOWING $44,000 lower than the 2008 median U.S. home price of $228,000. Given the quality of life in Austin, the climate, the diversity in the economy, and the city's reputation as a great place to live, I think that these numbers translate into one simple fact: Austin real estate is a bargain and a great investment for the future.
Ok, that's the good news. Now let's talk a little bit about the not-so-good. Every price category in Austin saw double digit decreases in the number of units sold in 2008 from the previous year:


PRICE RANGE-------2007 SALES-----2008 SALES-------% CHG

$0 - $80,000_________1,165___________906________-22.2%

$80,001 - $100,000____1,121___________798________-28.8%

$100,001 - $150,000___7,257__________5,334________-26.5%

$150,001 - $200,000___6,936__________5,625________-18.9%

$200,001 - $250,000___3,782__________3,243________-14.3%

$250,001 - $300,000___2,584__________2,120________-18.0%

$300,001 - $400,000___2,813__________2,340________-16.8%

$400,001 - $500,000___1,394__________1,006________-27.8%

$500,001 - $650,000____912___________695_________-23.8%

$650,001 - $800,000____423___________300_________-29.1%

$800,001 - $1,000,000___263___________198_________-24.7%

$1,000,001 +__________344___________239_________-30.5%

*Courtesy of the Austin Board of Realtors


While these numbers certainly are not encouraging, there IS some statistical data that indicates the fact that the Austin market is not as bad as many believe. Despite the dramatic decreases in the number of homes sold, the average sales price of a home in Austin only dropped by 1.01%. In addition, if we examine the months of inventory (this is the amount of time it would take, using current days on the market statistics, to every home on the market at that point) for each price category under $300,000, we see that each category has UNDER 6 months of inventory, which is considered a seller's market. There is no doubt that this GOOD news is masked by the large difference in units sold, but keep in mind, those 2007 numbers were significantly inflated by a mortgage industry run amok, lending money to under-qualified borrowers. So what does all this mean??? Simple...it's not as bad as it seems (at least, in the price ranges under $300,000).
Please feel free to comment. More to come.....