Housing Market in Austin (Dallas, Highland Park: days on market, sales, real estate)

[tennistime92]

Hi,

My husband and I have transferred down to Austin from Dallas. Wondering what the housing market is like right now. Has the price gone down any? We're looking to buy close to the downtown area. We currently is renting for at least a year. Trying to see how the housing market are going to pan out.

Thanks.

[llkltk]

Nope. Prices aren't really coming down except in maybe some poor performing areas. Austin's prices are expected to rise and still are higher than last year. We aren't the rest of the country. I would go ahead and buy now and not wait it out. If you are looking close to downtown, don't rent, buy now because you won't get a better deal later in the year. More jobs equals higher sales prices. Everyone should want this, it builds equity and is good for everyone. I'm building now and prices are going to increase in the next phase.

[jamestown1]

There isn't much housing stock near DT, so prices are high, and will remain so. IIkltk is right about the job market, but we have just started a national recession, so don't look for Austin to swim against this tide forever. Relo's have slowed down considerably. I think RE prices will remain flat for all of 2008 so I wouldn't be in a tremendous hurry to buy anything in Austin.

[southdown]

Originally Posted by jamestown1

There isn't much housing stock near DT, so prices are high, and will remain so. IIkltk is right about the job market, but we have just started a national recession, so don't look for Austin to swim against this tide forever. Relo's have slowed down considerably. I think RE prices will remain flat for all of 2008 so I wouldn't be in a tremendous hurry to buy anything in Austin.

I agree, be cautious. Where demand is high and supply short, of course prices will rise, but the trend changes in other pockets of Austin. Friends of ours bought close to town back in August last year, and they have now seen a $50k drop in prices in their street. We were planning to buy, but now renting and glad we have, still seeing prices dropping on places we looked at last year (Sept-Dec)

[atxcio]

I agree with jamestown for the most part, close-in will always be desirable and that will prevent prices from coming down very much. Whether they go up in the short term, there may be some doubt.

I'd say you are fine renting, it will give you the opportunity to really get the feel for neighborhoods and their value to you. It will also relieve some of the pressure to "buy now" because you need a place to live... so you can keep your eyes open and be ready when a good (individual) deal comes up. Just be ready to move quick when you are at that stage, as well-priced homes in desirable close-in areas will still get offers the very first day.

[austin-steve]

We currently is renting for at least a year. Trying to see how the housing market are going to pan out.

Your sentiment is one we've heard often since the national housing slump began affecting perceptions in Austin. "I'll wait and see what the market does before I buy". In other words, people are afraid and hope that they can "time" the market.

That has had the following effect on the market:

1) Better deal for those who are buying.
Supply has increased (more listings on the market) and demand has decreased (fewer buyers competing for the homes). This means those buyers who haven't put themselves on the sidelines can be more selective and generally negotiate a better sales price.

2) Higher rents.
Since fewer investors are buying, the rental stock is shrinking relative to demand. The job market is strong, which creates more rental demand. And would-be buyers who are volountarily taking themselves out of the sales market and becoming renters increase demand for rentals even more. Rental rates in Austin are therefore rising steadily and are looking strong. There was an article in todays Statesman about the apartment market and how well it's doing.

Unless someone is generically predisposed to renting for a year before buying (which isn't a bad idea if you're uncertain about the part of town you like, or want to make sure schools or job works out), there is no reason to wait because of market fears in Austin.

But what I do tell my investors is that we have a great situation in Austin. Lots of buyers are on the sideline, so you'll get a better deal. Then the person who helped you get a better deal by staying on the sidelines will rent your house from you for a better rate than would have been available without the increased rental demand.

See how this goes in a circle that benefits the buyers and doesn't benefit the waiters?

Steve

[casualobserver]

That would be rock solid advice if tennis found exactly the right house, Steve. However, it doesn't sound like she knows the market well yet at all.

Better she should monitor inventory levels and DOM stats while she gets to know the inventory. If and when both of those start heading down, then she can feel some pressure to buy.

[austifornian]

I think Steve's post was only addressing the 'time the market' aspect of the original post and in fact states that waiting a year before buying "isn't a bad idea if you're uncertain about the part of town you like, or want to make sure schools or job works out)" but I do disagree with his analysis of the situation.

It is highly unlikely that people trying to time the market are going to have an impact in any meaninful way. More likely, demand has decreased because of tightening credit and a lot of people who could have qualified for sub prime mortgages before the meltdown now find themselves out of the purchase market.

As far as the downtown market is concerned, personally, I feel that this is one of the riskiest markets in Austin right now. With all of the overpriced condos driving up land prices in this area, it's hard not to wonder if the area is not due for a reality check. That being said there are still plenty of opportunities to be found in the greater downtown area.

Another factor that you might want to consider while studying the market would be interest rates. You might up waiting for the market to go down in order to purchase a property only to find that interest rates have shot up making your cost of ownership as high or higher as if you had purchased the property at the higher price.

There are a lot of independent factors that all come into play here - your best bet is to follow the advice of casual observer. Get to know the inventory and make your move from there.

[Derek ATX]

I believe Steve and Austifornian are both correct in certain aspects. Demand in certain price sectors (ie: 250K and lower) has decreased and supply has increased due to the credit crunch and high foreclosure. I think the price range in what you are looking for is critical to your decision. I also believe that renting for a year to figure out where you want to live is a good idea as well. (I'm a Dallas transplant from several years ago and I did the same) I agree that the downtown condo market is very risky. However, areas close to downtown such as South Austin (78704 zip), Tarrytown, and Hyde Park are continuing to see increasing prices, short days on market, and multiple offers due to the demand. I have a client that is relocated from Boston thinking that it would be easy with the "bad housing market" to find a home but after realizing that every home in South Austin he tried to buy was either alreading pending or he was in a multiple offer situation he was finally convinced that he needed to step up his pace to get what he wanted. It's the same situation in Highland Park in Dallas (although the prices are higher). Close to downtown and higher home prices is creating demand, higher priced homes are more stable than the lower priced ones. I think your price range and the area where you want to live is critical to your decision. Yes, rents are up, yes rates are down, no, prices are not falling in Austin but have stabilized in growth from last year. Austin traditionally has not been like many other markets that you hear about in the news. We don't have the big swings in value like you do in Florida and California. Yes it is cyclical like any other real estate market, just not in the degree of most markets where you can gain or lose 20% in a few months.

[casualobserver]

Well, hard data is immensely superior to shooting from the lip, so I appreciate you offering just that in your post, derek.

Austin presents a job opportunity for me, but at present, not the best. So, I'm just keeping a passing eye out here, just in case the situation changes.

It is odd about Austin's R.E. market though. It shares a spot in the top 10 hottest job markets, but, unlike Phoenix (which is actually numero uno jobs for 2007), it supposedly is not crashing (per above). Phoenix ain't cheap, so I don't think the 250K and lower is the only market deteriorating in Phoenix.

My guesses are amongst these possibilities:

1. simply less total inventory to go around in Austin. The relo demand is chasing a smaller supply for the time being.

2. less speculation in Austin (becasue no one knew where it was not too long ago...lol!)

But, never fear, builders never know when to quit. They will keep trying to add to inventory until it bites them in the behind. This, plus the just the "noise" of the bad economy etc tells me I could wait 6 months and not be disadvantaged on pricing.