I saw an article that was written at the end of February that talked about the possibility of home prices going up in Austin in 2011.  The reasoning behind this is the fact that builders have really slowed new home starts.  The idea is that as what is on the ground today gets absorbed, there will be fewer and fewer new homes available in Austin.  People tend to move here whether the economy is good or bad and they are still coming.  As the population continues to increase, the thought is that there will not be enough new homes and that will put more pressure on resale.  Supply and demand generally says that with a higher demand and lower supply, prices will go up.  This isn't the first time I have heard this.  In a post I wrote called Austin Home Prices Expected to Rise  back in July of last year, I wrote about the same thing.  You can compare that post to the article.  Click here for the article.

I expect that there will be people reading this who will argue that regardless of new home starts that prices will drop.  I'm not saying that I feel 100% strongly that prices will rise as the inventory of new homes drops, but the reasoning makes sense and I would like to see it happen for the sake of sellers.

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