Open ended question regarding Austin real estate??? (Fredericksburg, Rollingwood: real estate market, foreclosures)

[JVAL01]

My wife and I recently moved to Austin in February and felt like we bought at the bottom of the market. Just can't see it going any lower than what we purchased at. That having been said, any local experts out there have any news regarding the current state of the local Austin market? I've heard national building starts have been creeping up and mortgage apps have skyrocketed (due to re-fi's, I'm sure) but I'm not sure what's happening locally. Thanks.

[CarnivalGal]

Money magazine predicts that Austin homeprices will drop another 0.8% and hit rock bottom in Q4 2009. There's a map on cnnmoney.com with predictions for the largest 100 markets inthe US.

[centralaustinite]

Who knows?!

So much depends on the micro-market in Austin, in other words, where you bought and in what price range. Right now, the below $250K market is hot, houses are selling quickly but it slows considerable above $350K.

Location matters too and whether or not your house is competing with builders finishing new houses and how much empty land (if any) is nearby.

Over the next year, I expect to see mid and high range home prices soften. You can already see it happening in Eanes and Rollingwood, the mix of homes available is shifting to older, relatively low-priced homes (below 600K), and prices are also coming down.

There is no such thing as a single Austin real estate market! I hope that you will do well.

[Exiled Texan]

To ditto Central, who knows?!

My opinion is the high priced properties (over 400K) are going to significantly soften. The higher the price point, the more the softening.

Why?

1. High price point purchasers theoretically have investments they use to buy homes. Who hasn't taken a massive hit on their investments?

2. California, NY, etc has all seen at least a 30% hit in their property values. No longer does Austin have the migrants from these regions coming with boatloads of cash?

3. Softer wages in austin generally, coupled with a softening labor market. Read an article in either the Wall Street Journal or Bloomberg recently how they expect high tech to lag significantly in recovery.

4. The inventory at these price points is sitting and building.

[austin-steve]

Well, it's still a mixed bag, but I felt a surge of adrenaline today that I haven't for a while.

After finally finding the right home for one of my buyers yesterday (the home's first day on the market), we went into 2006 mode because I had a strong feeling the home was going to have multiple offers at full price. After viewing, I immediately sent the buyers to my office, called my wife to go meet them and write up the offer (I had another appointment), met everybody back at the office and we got the offer submitted a couple of hours later.

Sure enough, we just barely beat the tsunami as I drove all the way out past Dripping toward Fredericksburg to get final buyer initials on a written counter-offer this afternoon. As I was leaving buyer's house the listing agent called to see if we had an executed contract yet and told me other offers were coming in.

One of our own listings received a fp offer at 3 days on the market last week. Phones are ringing, we're slammed with appointments and something has shifted in buyer mood, which I can't put my finger on yet. I wouldn't call it "urgency" yet, though we are seeing that on some specific deals, such as my example, but it seems like the fear and reluctance to buy is lifting, and buyers are coming out of the woodwork wanting to write offers.

I haven't seen a return of investors yet though. Mostly a lot of first time buyers and move-up buyers.

Anyway, that's my take on it at present. Next week could change again though, but I really think people are feeling cautiously optimistic again.

Steve

[jobert]

Originally Posted by Exiled Texan

No longer does Austin have the migrants from these regions coming with boatloads of cash?

True, they don't have boatloads of cash, but they are still coming. The net inflow of people to Austin will sustain prices by the simple law of supply and demand. I looked online through trulia and found that even foreclosures in my neighborhood are selling for what I paid 18 months ago ($100/sf). This is a 200K-300K neighborhood, and that may have something to do with it. I have confidence in this market, and anyone (especially first timers) thinking of buying should too.

[woodinvilleguy]

One thing that struck me today was how much the recent hail storm will benefit the local economy? Roofers, insurers, and Car repair places are now fully booked. I wonder if such a local event can stimulate the local economy into a micro-recovery.

[centralaustinite]

Glad to hear your news Steve!

I can remember August of 2007 (maybe the 9th?), something just "shifted" and you could feel the air start to go out of the market (that is when the interbank lending rate suddenly quadrupled). There is definitely a psychology to the market, Keynes called it "animal spirits" but sentiment definitely plays a role in whether or not buyers will pull the trigger or "keep looking" or decide to "lease and buy later."

[CATXTransplant]

In the lower end (under $300K), I have been writing offers and going up against multiple offers. My guess is that it's the first-time buyers in a frenzy to get the tax credit and low rates. I definitely feel things changing as my phone has been ringing off the hook with people I haven't heard from in months. I went to show one of my own listings in Steiner on Saturday. When I got there, there were three other Realtors waiting in the yard to show as someone was inside showing already. 2 other cars pulled up and asked if it was an open house. I said, "It is now!" One of those people wrote an offer. I've been working until 3 a.m. again - haven't had to do that since I was a broker in CA between 2000 and 2005.

I too feel the surge of adrenaline.

[Trainwreck20]

My neighbor is an agent with some years behind him, and he has mentioned that it is buiser at this time of year for him than he can ever remember it being. I don't know anything about the price ranges or whatever, but he did mention it is not overly busy, per se, just busy for the 'slow' time of year.