The Austin American Statesman ran an article yesterday on Austin real estate market’s rise in 2006 and what the experts predict will happen in 2007. No suprises here as that’s what we’ve been tracking for the last six months. But there are some things to watch out for if you are in the market to purchase a home in 2007 or if you are planning to sell a house. Home prices are up about 7% overall in the market for 2006. But there is going to be a lower supply of houses for 2007 which will continue to drive housing prices upwards. This is going to be a seller’s market with this low inventory situation. The reasons are below….
Higher home prices are partly due to a tighter supply.
Several consecutive years of strong sales have reduced the inventory of existing houses on the market to the lowest level since 2001.
The Real Estate Center estimates the Austin area has enough existing homes on the market to last just 3.3 months at the current rate of sales. That’s considered a tight supply, putting sellers in the driver’s seat on setting prices.
“At (inventory) levels like this, I would expect to see home prices increase pretty dramatically in the next year,” said Mark Dotzour, chief economist at the center.
“Assuming nothing drastic happens that we don’t foresee, I don’t know why 2007 won’t be just as good a year as 2006 or better,” said Jim Gaines, research economist with the Real Estate Center at Texas A&M University.
Also with the strong demand the builders are going to be looking to push their prices upwards.
Investors from California may subside because of their markets downward turns. Investors have been very active in Austin these past few years because they have so much cash in their homes from California. I’m seeing a number of California investors who are having a hard time selling their homes out there.
Lastly with prices rising as much as they are we could be looking to put home ownership out of reach for a lot of buyers. The main reason for that is…
“Generally speaking, housing prices are growing about twice as fast as wages,” said Brian Kelsey, assistant director for the Capital Area Council of Government’s Center for Regional Development.
Still, Austin-area home prices remain low compared with those in many other markets. Nationally, the median existing single-family home price was $221,300 in October, according to the National Board of Realtors.
We have a strong job market so look for continued growth in pricing, lower inventory and more buyer competion for the well priced homes in good areas. Buyer’s beware…you better be armed and ready to pull the trigger on what you want otherwise you’ll lose out to someone more prepared then you are.
For the complete Statesman article: Austin Home Sales Hopping
