2008 Home Sales Have Started Off Beat

In 2007 there were a total of 13,162 homes sold in Austin Texas at a 9% average increase in value from the previous year. While the number of homes sold was down 12% in 2007 compared to 2006 in Austin Texas, homes sold for an average of $14 per square foot more in 2007 than in 2006. The net result was a 3.6% overall decrease in sales revenue for Austin homeowners in 2007, which is a relatively modest decrease.

However, as of 11:00am on January 31, 2008 the number of homes sold in January 2008 compared to January 2007 has decreased by 37%.  Although the median price of homes sold has increased in 2008, it is a modest increase of approximately 6%.  Additionally, 50% more homes were withdrawn from the market in January 2008 compared to the same time in 2007.

What does this mean for 2008?  With a 4.5% unemployment rate and a 2.1% employment growth rate compared to 5% and 1% respectively nationwide (according to the Texas Workforce Commission on their December report released on 1/19/2008), the fundamentals for Austin Texas real estate remain strong.  It appears that confidence in the national economy are creating hesitancy on the part of buyers to spend on a new home, therefore creating a significant lull in purchasing activity in Austin early in 2008.  Once the headlines improve and people get “back to business as usual”, activity should increase again with possibly with even more momentum than usual due to more people than normal looking for homes as we get closer to summer.