Austin Unemployment and Austin Real Estate Market Update January 2009
published on March 5, 2009
Austin unemployment increased from 5.2% in December 2008 to 6.4% in January 2009 representing 2,800 less people employed in January 2009 than the previous month. In comparison, during the same time period the State of Texas unemployment rate increased from 5.7% in December 2008 to 6.8% in January 2009. The United States unemployment rate increased from 7.1% in December 2008 to 8.5% in January 2009.
During the first two months of 2009 there were 770 single-family homes sold within the Austin city limits with a median sold price of $113.76 per square foot ($231,750) and averaging 79 days on the market. This compares to the first two months of 2008 when there were 1,166 homes sold (34% more than 2009) with a median sold price of $117.13 per square foot ($225,000), which is a 3% reduction in the median sold price compared to 2008, and averaging 67 days on the market.
While January was extremely slow for Austin tx real estate, homebuyer activity did pick up after President Obama signed the U.S. Stimulus Plan on Tuesday, 2/17/09. Many buyers that were on “hold” during January and early February 2009 have proceeded with their Austin home search since they now understand how the stimulus package will affect their home purchases and values. With mortgage rates at all time lows (5.24% for a 30 year fixed rate as of 3/5/09 according to bankrate.com), with an $8000 tax credit for first-time homebuyers now in place, and with other measures being taken by the government to stabilize home prices, there are plenty of reasons to buy an Austin home during 2009.
Lower interest rates and a tax credit can have a material impact on your purchase of a new home, which can offset much of a buyers risk if the market has any further declines. Low interest rates, even more so than price in many cases, are helping buyers achieve “good deals” right now. In August 2008 when a 30 year fixed mortgage rate was 6.48% a qualified buyer would have been able to purchase home for $175,000 with 20% down resulting in monthly principal and interest payments of approximately $883. In early January when mortgage rates were at 5.26% this same qualified buyer could now purchase a home for $200,000 resulting in virtually the same 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. This just shows that price is not the only contributing factor to getting a “good deal”. If you have decent credit, some cash, and can substantiate your income, it’s a good time to consider buying an Austin home.
If you need to sell your Austin home during 2009, another factor to consider is that the period between January and June is historically a good seasonal time to sell due to average monthly increases in the number of homes sold, monthly decreases in time on the market, and monthly increases in sold prices per square foot. With low mortgage rates and the new tax incentives in place, there are already an increased number of buyers on the market compared to just one month ago. If you need to sell during 2009, don’t wait until the "hot season" has passed you by. Start the sales process now so that you don’t miss the opportunity to find the right buyer.
Source: Unemployment data provided by the Texas Workforce Commission and raw real estate data provided by the Austin Board of REALTORS® and interpreted by Austin REALTOR® Brian Talley of Regent Property Group. Although the above information is deemed reliable, it is not guaranteed to be reliable or accurate. The information contained herein is subject to errors and/or omissions and are not in any way guaranteed as accurate or reliable by Brian Talley or by Regent Property Group LLC.
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