Is the Austin real estate estate market about to fall off a cliff?

[Kosmonaut]

Originally Posted by tickledpink

I have no idea what the market is going to do in the future, but I sure am glad my husband and I bought our first home back in November of 2011 instead of waiting. We purchased a new build in Cedar Park for 159k. Our same floor plan is now selling for 197k. Yikes! Plus, we locked into a 3.00% interest rate (first time home buyer bond program with a special loan). I can only hope that in 5 years or so, prices and interest rates aren't so high that we can't afford to move into a larger home.

Well done. The low price, low rate buy-in has secured a solid financial future for your family. Don't worry, 5 years from now EITHER prices or interest rates will be high, but not both. If Interest rates get up to 8-10% 5 years from now, I hope you have cash saved up to make the down payment if you plan on trading up. Save the money now, and find high yields in other investments besides real estate.

[tickledpink]

Originally Posted by llkltk

If they are still building in your neighborhood, you can't base a resale price on new construction. You said "our same floor plan". If your neighborhood is built out, great, if not, you have more years to wait for appreciation.

Yes, that's new construction. Our neighborhood is almost built out, they'll be finished within 6 months. Resale of our model has been anywhere from 180-190, which is still a good jump from what we paid less than 2 years ago. We plan to stay put several more years, so while the price increases of homes doesn't effect us directly at the moment, it's been interesting to observe.

[frankrj]

Originally Posted by Kosmonaut

Well done. The low price, low rate buy-in has secured a solid financial future for your family. Don't worry, 5 years from now EITHER prices or interest rates will be high, but not both. If Interest rates get up to 8-10% 5 years from now, I hope you have cash saved up to make the down payment if you plan on trading up. Save the money now, and find high yields in other investments besides real estate.

I agree. A low price and low interest rate to finance the home are hard to beat & hard to go wrong. Those two don't come around twice in a lifetime often, unless you get to 100+ years of age (well, HTH would I know about that?? ).
Anyway, I am going to lean towards rates being much higher. I'd invest in credit card companies. They are going to make a killing with higher rates, more balance transfer offers, and the imminent higher unemployment numbers. I don't think Austin will fall, maybe a slight dip. The art and music scene plus it being a major university town are strong support.

[atxcio]

Originally Posted by Kosmonaut

Home sales in Austin jumped in July with 3.5% financing secured in May and early June. Anyone want to guess what homes sales are going to be for August with the 4.5% rates secured in late June and July?

Austin area sells more than 3,000 homes in July, ABoR reports - Austin Business Journal

Well here is your answer:

Austin-area home sales jump 30% in August