2011 July Austin Advanced Market Report is Here!

The Austin real estate market continues to strengthen: higher demand (sales) with a stable inventory (homes for sale). With interest rates not changing, current high occupancy rental rates and positive inward mobility the average/medium value of 85% of the homes in Austin have stabilized. In some areas, price ranges and zip codes we are seeing multiple offers on homes, including good offers on homes being trumped by CASH offers or buyers paying above the list price.

While it is normal for sales in June to increase over May, a 10% increase is very strong, higher than four of the last five years! For the first time in five years the number of homes for sale dropped between May and June. It is normal for inventories to increase during June by about 1%. However this year inventories decreased by 1% from May to June.

Overall the Austin market is a “Normal Sellers Market”, meaning there is less than 5 months of inventory. Above $800K representing less than 4% of sales, the market is still an “Extreme Buyers Market.”

We expect demand for homes below $800,000 to increase, which may cause pressure for prices to increase. Rising values will occur if buyers are willing to risk more for home ownership, and that is related to buyers confidence in the future. On average we have not seen prices rising, however prices have stabilized in most of the Austin market. The closer to downtown and the lower the price, the greater the pressure for prices to rise. In time this pressure will increase home prices.

Unknowns that could affect the Austin market in the short term: impact of FHA changing the amount that can be borrowed, banks requiring more down payment, 6,000 additional people expected to move into Austin in the next three months, several companies that are relocating major divisions to Austin, increases in interest rates (not expected), and the impact of 25,000 college students returning to Austin in August on rental availability and rent costs.