SellAustinTexas

Here’s a snapshot of the current state of the residential market as of May and how we compared to last year. 1,891 single-family homes were sold in Austin last month, or 8 percent fewer than in May 2010.  The median home price increased 4 percent from May 2010 to $198,100.

Austin added 3,127 new single-family homes on the market in May, 2 % more than last year. There were a total 9,744 active single-family homes listed — new in May and existing — or 13 percent less than the year ago total.

Homes spent an average 81 days on the market – 27% longer than May a year ago, but the lowest figure since October. At the same time, pending homes sales were up 53% year over year to 2,156 in May.

It seems last year’s tax credit created demand earlier, causing the market to peak in the spring. The considerable increase in pending sales from May could indicate Austin is returning to a typical seasonal cycle.  While sales are still down, the increase in pending sales and the decrease in days on market shows a rising demand for homes in Austin.

Another important fact to note: a total 1,269 leases were signed in May, 4 percent higher than the same time last year. Tenants paid a median $1,250 monthly in rent, which is about 4 percent higher than last year.  The increase in leases and the increase in rent show a rise in demand in the lease market as our population increases.  This makes landlords very happy!

If you have questions on the Austin housing market and whether or not it’s the right time to buy or sell, feel free to give Chuck Stephens, our buying expert, a call at 512-947-8077 or drop him an email at cstephens@cbunited.com.  To see current inventory, visit our web site www.dmtx.com.

If you are considering buying a home in Austin, the time is now.  Home prices have not dropped in the past few months.  In fact, they are increasing.  Mortgage rates remain at an all time low.  Most importantly, demand is increasing.  We are at an equilibrium in the market as far as buyers and sellers and the supply of good lots and homes is getting very tight.  If there were a time to make a move and invest in a home – the time is now.

The most important factor in selling a home is the price.  There’s 3 different categories of prices and every home on the market falls into one of them.

#1:  Overpriced. Most buyers think all homes are overpriced.  That’s because they are looking for a great deal – a steal.  And rightfully so.  We all want to get a deal. But, it’s just not true.  Homes that are overpriced in this market stick out like a sore thumb and most likely won’t even fall onto a buyer’s radar screen.  This happens for several reasons.  The seller bought it 3 or 4 years ago and has to get back what they put into it or the seller makes a few thousand dollars worth of improvements, calls it a remodel and tries sell it at an inflated price.  It is often the fault of a real estate agent not being honest with a seller about the market and instead allowing the seller to dictate the price – not the market.

What to do?  Go ahead and make an offer based on the market.  Sometimes a seller needs a reality check before making a price adjustment.  Maybe you won’t be the first one to make that offer and it could get accepted.

#2 Market Value.  Most homes are priced at market value.  Getting a good deal on a home at market value is a matter of timing, education and skill.  An experienced agent can work on your behalf to find a seller’s motivation, agent’s motivation and points beyond price that can get a deal done.  In this instance, offer less than the asking price and go from there.  More often than not, they will come off their price.  But as the Austin market gets tighter, we are seeing properties sell at or very close to their asking price.

#3 Undervalued. Getting an underpriced home is about being in the right place at the right time.  There are a lot of buyers out there waiting for that low priced deal to come along.  Deals go quick and a savvy agent can make sure you get in front of them before someone else.

It doesn’t take a rocket scientist to know a good deal from a bad one in today’s market.  Internet sites like AustinHomeSearch.com provide a great jumping off point to begin a home search. You can even compare homes to figure out pricing.  But when it comes to making the investment, it’s smart to have someone who has intimate knowledge of the market and can negotiate on your behalf to make sure the investment is the right one.

You probably saw the headlines last week – according to Standard & Poor’s S&P/Case-Shiller Home Price Indices, U.S. home prices declined by 4.2% in the first quarter of 2011, after having fallen 3.6% in the fourth quarter of 2010. The national index hit a new recession low with the first quarter’s data and posted an annual decline of 5.1% versus the first quarter of 2010. Nationally, home prices are back to their mid-2002 levels.  These numbers make for some grim news stories but what are the underlying factors and how do they affect Austin’s market?

- One of biggest factors for these deflated numbers is the First-Time Homebuyer Tax Credit from last year.  There’s bound to be a fall since there is no longer such a major incentive for first time buyers.

- Many metro areas have an excess of inventory created by the housing boom and bust.  Texas does not.  In fact, in Austin, our inventory is at an equilibrium.  Homes that are priced well will sell.

- The Texas economy and Austin’s economy in particular are experiencing steady growth.  We have relatively low unemployment and a diverse economy in high growth industries – people want to be here.  Over 900 families are projected to move here a month throughout 2011.

- New construction in the Austin area is slow to almost non-existent due to housing developments not getting financing.  Lack of new homes will trigger an increase in home prices.  We have already seen an increase in the median home price from the 1st quarter of last year.  Home values are expected to increase by 4.6% next year, 14.6% in 5 years and 87.65% in the next 10 years!

Deflated home prices, low mortgage rates, lack of new construction and a big increase in population will create big increases in future home prices.  Don’t let the national headlines fool you – now is the time to buy!