Austin Real Estate Market on the Rise! Download our February 2011 report here.
February 15, 2011 by Laura Duggan · Leave a Comment
The positive vibes in the economy have finally landed in Austin. Home sales are up for the second month in a row. There is also a strong number of homes under contract, which shows us that sales will continue to be strong through February and into March.
The number of homes coming on the market is also on the rise—this is a good thing. There is a lot of pent up demand for new listings . More homes on the market will only continue to drive the market forward.
Distressed property sales are also on the rise. Last year, nearly 15% of all sales were either a short sale or foreclosure. Last month, 21% of all sales were a distressed sale. We are still waiting to see how many distressed properties will come on the market this Spring. Many experts are expecting a large number of distressed properties to be released into the market this year, following the “foreclosure freeze” over the holidays.
Cash Buyers played a huge role in sales last year and continue to be a strong presence in our market this year. Last year, nearly 1 in 5 sales were for CASH. Last month (January 2011), almost 1 in 3 sales were for CASH. That’s 30% of the market selling for CASH.
Sales over $500,000 have stalled in Austin. Lat month, 54 homes out of 1,247 homes on the market, sold over $500K. That is an inventory of 23 months. This is the highest this number has been since the bubble burst in October 2007. The two factors that contribute to this halt in sales are financing and unrealistic sellers. Loans over $417,000 are considerably harder to qualify for and banks are hesitant to originate these loans. Sorry over $500K sellers, but with a strong majority of you on the market having purchased your property within the last 5 years—getting your money back is not very likely.
The biggest factor that may change the growth we are seeing are interest rates. Last month, interest rates climbed nearly half a point from 4.5% to 5%. When money gets more expensive, sales slow down significantly.
See the rest of our extensive report for an in-depth look at the Austin real estate market by clicking here.
Best,
Laura
