Austin Texas Real Estate Market Update 2008
published on January 1, 2009
With a national housing and credit crisis and an economic recession at hand, one might think that Austin real estate would be distressed. While Austin real estate has not been immune from the pain, the capital city of Texas has fared well through the economic downturn. Incredibly, home prices netted an actual increase between 2007 and 2008, however so slight at $.82 per square foot. Home prices are up an incredible 26% since the year 2000.
In Austin the pain was felt in the actual number of homes sold during 2008 compared to previous years. There were 8,351 single-family homes sold within the Austin city limits during 2008, a grand total of approximately $2.5 trillion dollars worth of home purchases. This was 22.7% fewer homes sold and 24% less dollar volume compared to 2007. The last time there were fewer than 8,351 single-family homes sold in Austin was 1997, but it was just 2004 the last time the dollar volume was below $2.5 trillion. So there was a large drop in the number of homes sold but the average home sold during 2008 had a much higher sold price than previous years.
While it is much more challenging to sell a home in Austin than previous years, the typical seller is not just “giving it away.” Rather than take less, many Austin home sellers are taking their homes off the market. Others who are fortunate enough to own a home in an area with low supply and high demand are still able to sell at a favorable price. However, there are some homeowners who need to sell quickly, which does present the occasional “deal” for aggressive and patient buyers.
Want to find a good deal? How about a price discount while still paying a market purchase price for a home? The answer……Extremely low mortgage rates! Bankrate.com shows mortgage rates for a 30 year fixed mortgage to be 5.26% as of 1/1/2008. This is the lowest rate on record since Freddie Mac began tracking these rates in April of 1971. Just four short months ago 30 year fixed rates were at 6.48%. To put this into perspective, let’s consider the circumstances of a buyer who needs to pay no more than $885 per month in principal and interest payments in order to purchase a home. Four months ago a buyer would be able to purchase home for $175,000 with 20% down on a 30 year fixed rate mortgage at 6.48% resulting in monthly principal and interest payments of approximately $883. With mortgage rates at 5.26% this same buyer can now purchase a home for $200,000 resulting in monthly principal and interest payment of approximately $885. This is a 12.5% ($25,000) higher purchase price for the same monthly payments on a 30 year note simply due to the lower interest rate. Now that is a deal!
With the combination of lower sales volume for sellers and with mortgage rates at all-time lows, it is an excellent time to consider buying a home in Austin. For those homeowners that don’t have enough space in their existing homes, this is a good time to move up to a larger home to take advantage of the low mortgage rates as well. As such, my recommendation is to sell competitively and buy aggressively during 2009.
Find Austin homes for sale by clicking this link. Contact Austin REALTOR® Brian Talley of Regent Property Group at 512-554-9714 if you need help buying or selling a home or if you have a need for Austin office space.
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