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As the national housing trend shows a slow-down, Austin is just the opposite. Sales of homes in the U.S. have been declining, as have prices. Markets that have seen rapid appreciation are now cooling. As many markets cool off, Austin is heating up.
In October, 2004, existing home sales nation-wide were down 2.7%. During that same time period, sales of existing homes in the Austin area were up 27%. That is big news. The supply of homes on the market in Central Texas in October, 2005 was 7,654, a 3-1/2 year low. Nationally, the supply of homes on the market in October, 2005 was 2.9 million, which is a 19 year high. Single family home starts in the third quarter of this year in Austin increased by 21%. Nationally, there was a decrease of 2.7%.
So what’s going on here? Austin, which took a huge hit during the technology bubble burst in 2000/2001, is on the way back. Unemployment was down to 3.7% in December, Austin’s lowest rate in five years. The job market is good again and people are relocating to Austin from all over the U.S. One economist, who told of Austin gaining almost 13,000 net new jobs over the last 12 months, is predicting job growth in the Austin area of over 2% over the next two years and almost 4.25% over the next 25 years. Those are strong numbers.
Austin is also a very desirable retirement area, especially areas west of downtown. This is the beginning of the Texas Hill Country, where fertile plains give way to rolling limestone hills. The area feels like a resort destination, with many golf courses and phenomenally clear Lake Travis. This part of the Hill Country is nothing like what most people think of when thinking about Texas. Despite the resort type feeling, residents are quite close to all that Austin has to offer.
Investors have also been buying a lot in Austin. Home prices in Austin are lower than the national median by almost $50,000. Investors are buying, fixing and flipping Austin homes. They are also buying rental property and looking for appreciation over 5 or so years. Although investors are flocking to Austin, they’re not pushing prices up as steeply as increases have been in Southern California and other areas. That is really good news for Austin. A steady appreciation of 6% through 2006, which is what is being predicted, would be great compared to skyrocketing appreciation that could well pop after a few years.
Anyone looking to buy a home in Austin may want to do it sooner rather than later.
Written January 29, 2006
Want to see how other markets are performing? Take a look at some of the areas below to see how Austin compares.
Raleigh NC Real Estate
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