I was reading in the Austin Business Journal about the population growth for Austin over the 15 years making it the highest growth city in Texas.  With that growth, it is likely that the demand for homes will outpace the number homes available. Builders will have to also have to increase their building substantially as the demand new housing units goes up. This will also cause real estate  prices to increase across the Austin area due the excess demand.

if you are thinking about buying a home right now in this market, it is to your advantage to do it before that high growth kicks in otherwise you will be spending more money for a home. (see the complete article below)

AUSTIN (Austin Business Journal) – The population of the Austin metro area is projected to grow by more than 2.7 million by 2025, according to an analysis by bizjournals.

Austin’s projected growth rate ranks fifth among 250 U.S. metros studied.

Bizjournals forecasts an 87 percent growth rate from the area’s 2005 estimated population of 1.5 million to a 2025 projected population of 2.7 million, giving it the highest growth rate of any Texas city.

The McAllen-Edinburg area is projected to be the second-fastest growing area in Texas with an estimated 56 percent growth in population.

Among other Texas cities:

Dallas-Fort Worth – 50 percent increase to 8.8 million

Houston – 48 percent increase to 7.9 million

San Antonio – 41 percent increase to 2.7 million

Austin Real Estate Scene › Tools — WordPress.

The Statesman today published a story about how the Austin Home Builders are cutting back homon building new homes due to the credit crunch.

Tight credit for builders and buyers alike, slowing job growth and the darkening clouds over the economy have dramatically changed the new-home landscape in Central Texas.

Most the builders have their own in house mortgage or are partnered with a major loan company and offer lots of incentives to use their loan service. This is because they make a lot of money on the back with all the interest that accrues over the life of the loan. But with the financial markets in turmoil the landscape of home buying has slowed way down.

Two years ago, builders started a record 16,000 homes in Central Texas. This year, they’re on track to build slightly more than 10,000, based on new figures from Residential Strategies Inc.

But it also means there are great deals out there!

Short term, that means some good deals for buyers as builders pile on incentives to sell off their inventory before the end of the year.

builders are offering concessions ranging from free upgrades for buyers making a full-price offer to as much as $100,000 off on an $800,000 home.

This housing slowdown will take some time work out.

Housing experts say the slowdown could continue to deepen for at least another year, until the mortgage and financial markets recover.

Here is the full story from the Austin American Statesman

http://www.statesman.com/business/content/business/stories/realestate/10/12/1012housing.html

Modest near-term movement is expected in Austin TX real estate sales, with a recovery in sales seen during the second half of the year, according to the latest forecast by the National Association of Realtors®.

Lawrence Yun, NAR chief economist, said some pullback after a sharp increase in the previous month was expected. “The overall decline in contract signings suggests we are not out of the woods by any means. The housing stimulus bill that is still being considered in the Senate is critical to assure a healthy recovery in the housing market, jobs and the economy,” he said.

Furthermore, Yun said location has never mattered more than in the current market. “Some markets have seen a doubling in home sales from a year ago, while others are seeing contract signings cut in half. Price conditions vary tremendously, even within a locality, depending upon a neighborhood’s exposure to subprime loans.”

Let’s take a look at the sales statistics for June 2008 to see how the Austin TX real estate market looks:

Although new listings in Austin increased 19% in June 2008, pending sales were down by more than half from June 2007. Likewise, sold listings decreased 18% from last year. Bucking national trends, the average sales price increased 5% to $266,175.

Again, as Yun said, real estate sales and prices vary from neighborhood to neighborhood, even within the same city. For the latest Austin TX real estate market conditions in your area, call or email me.

Studies indicate that over 80% of today’s home buyers visit the Internet long before seeking the professional assistance of a REALTOR®. This means that, thanks to popular realty-themed websites that compete for your business, you the client are already armed with more information than ever before. Often consumers are more educated about the market or area then the REALTOR®. That’s not a good thing for a Realtor.Realtors need become familiar with these kinds of sites and the features they offer. This data will not only prepare a Realtor to answer any questions a clients might have about homes, the market, schools, taxes, etc…

I like it when a buyer or seller is knowledgeable about the market and how a real estate transaction works. They are much easier to work with and are better prepared to deal with it. I’ll give them all the information they need to know.  Some buyers can’t get enough and others just want an overview. Some want none but I give it to them anyways.

Below are some websites that consumers can use to help them in their search and education on learning more about…

Property Listings & More

1) Redfin.com: In addition to listings, this site offers information such as how long a home has been for sale, its last sales price, and its current value. It also provides virtual tours to listed homes.
2) Trulia.com: Like Zillow.com, Yahoo Real Estate which offers satellite views and the estimated values of each home, Trulia’s “heat maps” show how hot or cold an area is based on prices, sales, and popularity among its users. Trulia.com also has free tools real estate agents can easily add to their own websites to increase functionality and traffic.
3) Maps.Google.com and Maps.Live.com: For bird’s-eye view, even 360 degrees in some cases, these amazing map sites offer a virtual perspective of available homes that’s truly hard to beat.
4) Walkscore.com: interesting site that rates any address based on the walking distance of its nearby stores, restaurants, schools, parks, coffee shops etc.
5) SchoolMatters.com: A Standard & Poor’s company, this site offers parents (and potential homebuyers) an objective rating of public schools and public school districts by region, including test scores and demographics. GreatSchools.net offers similar info and ratings on private schools based on region.

Government Websites Government loan programs offer great opportunities for many consumers in many regions across the country, especially first-time buyers and veterans. The following websites are likely one of the first of many sites potential homebuyers visit during this process:

1) HUD.Gov is the official website for the U.S. Department of Housing and Urban Development (H.U.D.) This site lists HUD homes and provides information for home buyers, including financing options and home buying programs available through the Federal Housing Administration (FHA).
2) Homeloans.va.gov: This site houses information about government home loan programs specifically for veterans.

Post if you think of any more sites I should add to my list. I look forward to Giving you any good information you need to make an educated decision on buying or selling a home.

Unfortunately, the media’s continued focus on negative real estate news is not the whole story especially in Austin and this negative news is resulting in buyers missing tremendous opportunity by sitting on the sidelines. Here are some facts to consider if you are on the fence about purchasing.

Fact #1: Some six million Americans are expected to buy a home this year. Six million people in the game make up a pretty big game. That’s a level of sales activity topped only by 1998.

Fact #2: There is still over $23 trillion of value in U.S. housing stock. Home ownership continues to be the basis of our wealth in this country.

Fact #3: The housing market cannot help but grow. Our country’s tremendous wealth, liquidity, and entrepreneurship will continue to drive our economy. 70-100 million people will be added to our market in the next 40 years.

Fact #4: Real estate is cyclical. The biggest fear in good times is that the fair weather won’t last forever—because it doesn’t. But the reality of a cyclical real estate market also provides its brightest hope in bad times—foul weather won’t last forever either. What’s happening today is a market correction, severe in some places, but it’s not the end of the world. As shown by Fact #1, people are still buying and selling homes. The markets will stabilize.

Fact #5: 2008 is the best year to buy a home in 35 years. 1973 was the last time mortgage rates were this low in a buyer’s market. We had rates this low in 2001 and 2002, but those were strong seller’s markets with little inventory. The last two big buyer’s markets, in the early ‘80s and early ‘90s had much higher rates. Low rates and good inventory make 2008 the best year to buy in decades!

Fact #6: First-time buyers have a real advantage in today’s market. First-time buyers can buy at a reduced price without having to sell at one too. Higher limits on lower cost conforming loans also help first-time buyers purchase more home for their money. Today’s ‘starter’ homes can be pretty impressive.

Fact #7: First-time buyers lose money while they wait on the sidelines. First, renters typically pay more state and federal income taxes than homeowners with a mortgage deduction. Renters are also losing the wealth they could be accumulating as they pay down their mortgage and as their home increases in value over time (as it surely will).

Lastly, renters who wait to buy will lose money if interest rates increase by the time they finally act. Higher payments from higher interest rates represent money buyers could have kept if they had bought earlier. Conversely, if they were willing to spend that amount of money earlier, they could have bought more home.

Fact #8: Homes sell when they’re priced right and show well. Buyers are looking for value in today’s market. When sellers make their home’s value obvious, they make a sale—it’s as simple as that.

Get out there and BUY!

I wanted to give you some market statistics that we heard from the Austin Chamber of Commerce from a meeting we had this week.

• In the past ten years, Austin’s population has increased by 487,000.
• 1,000 persons per week are moving into Austin MSA
• By the year 2030, Austin’s MSA population is predicted to be 3.5 mil
• Williamson county has increased by 53% since 2004.
• Williamson county population is expected to be 1 mil by 2030
• 20% of jobs in Austin require a Bachelor Degree
• 42% of workers have a Bachelor Degree creating approx. 80K workers are underemployed
• Professional/Business Services have added the most jobs in the last 12 months
• Since 2000 Austin MSA has experienced approx 14% decline in Hi Tech jobs
• Hi Tech compensation has declined 7% since 2000. Private sector wages have increased 6%
• There are approx 3000 Hi Tech companies within the Austin MSA which comprise 33% of total payroll
• The average income for Hi Tech workers is $80K
• Residential building permits peaked in 2005
• Austin had an average of 4 months inventory of residential properties available for purchase in 2007. In 2008, this number has increased to 4.7 months. The nationwide average is 6 months, so Austin is below the average in respect to residential inventory.
• Austin is one of the nation’s biggest targets in Venture Capital.
• Austin’s MSA population is less than 7% of Texas’ population, but holds 48% of Venture Capital funding in Texas.
• 129 companies relocated to Austin since 2004
• 34 companies relocated to Austin from other cities within Texas. California follows in second with 29 companies relocating to Austin, and 17 companies have relocated internationally to Austin.
• The Chamber’s plan is to bring 72K jobs to Austin within the next five years
• And last, but not least………By the time you drive home this evening, there will be 84 more vehicles on the roads than there were whenever you went to work.

Here is a rendering of a great new Condo/Hotel development called the 21c being drawn up for Waller Creek area on the east side of Downtown Austin. Read the full story here in the Austin American Stateman: 
Waller Creek Condo Development Story

(From the article:
Work is scheduled to start in early 2009 on a 16-story 21c Museum Hotel, which will have 243 rooms and double as a contemporary art museum. The museum will be open free to the public year-round.

The hotel will be followed by a 49-story condominium tower with 295 residential units, and in the future, a 425,00-square-foot tower with offices and shops or more housing, according to the Poe Companies, a Louisville, Ky.-based real estate firm.

The company expects the hotel and condo towers to open in 2011. Prices have not been set for the condos.

The condo tower would rank among the tallest being built or planned amid downtown’s residential building boom.

This is a $350 million project on 3.5 acres and is going to pump a millions of property tax dollars

This development is a great for this area of downtown Austin because it will become a draw for people in the downtown area for the parks and water. It’s possible this could be the Austin version of the San Antonio River Walk. People love to be around parks, water, bars and restuartions.

“This is like that proverbial place in Central Park in New York City,” said Steve Poe, president and CEO of the Poe Companies, which is one of the partners in the project.. “That’s what we’re creating.”

Wow.. Mr. Poe!…This isn’t anything like Central Park yet! That’s a little over the top about this area.

There is going to a world  key attraction in the project is expected to be its restaurant, which will serve contemporary American cuisine and has a big name behind it, Michael Bonavides, who was a founding partner of the restaurant group that owns and operates Tribeca Grill, Nobu and Rubicon.

Perry Lorenz who own this land for many years and probably making a ton of money selling it now that the Downtown Austin real estate is so Hot! This project is the start of more areas like this throughout downtown Austin from 15th St. to Lady Bird Lake (Townlake) over the next 10 years.

http://www.statesman.com/business/content/business/stories/realestate/04/03/0403hotel.html

http://www.21cmuseumhotel.com/austin/

Let’s take a look at the Austin real estate sales statistics for February 2008 to see how the Austin TX real estate market is looking:

Austin saw a dramatic 58% increase in new listings this February, when compared against February 2007.  Pending and sold listings, however, decreased by 12% and 27%, respectively.  The average sales price remained almost unchanged, increasing by a modest .33% to $233,015.

This shows us that Austin home sales are slowing down but the average price is still rising modestly. Most listings are getting A LOT of traffic if they are priced right as buyers are coming out of the woodworks.  We had personally had 5 listings get contracts on them in less then 4 weeks and tons of agents are talking about how the activity has been so hectic (in a good way) lately.  Even if we end up being a bit slower than 2007, which was a good year by the way, we still could have a very healthy real estate market as we currently do!!!  Most people would beg to be in our market right now. Just like when you are looking at the weather, look at what is going on locally to get the best indication of how our real estate market is doing.  

Our local economics look great and those are the #1 indicators to watch when figuring out our market of where we are at today.  We love this kind of market.  With about 5 months of inventory, that puts us still in a seller’s market, but 6 months or more of inventory puts us in a buyer’s market.  So since we are so close to that mid point, what that means is you can still sell your home at an okay price (depending on location of course) and you can still find a good deal to buy allowing you to take advantage on the selling and the buying side.  Normally you sell high, buy high or sell low and buy low.  

And even though interest rates are still good, and The Fed cut the Fed Funds Rate by another .75%. However, as we’ve seen following every Fed rate cut in the recent cycle, chances are very good that Bond pricing will worsen following the cut…which results in higher home loan rates. This happens because Fed rate cuts help to stimulate the economy, by making it less expensive to finance personal and business purchases…and this in turn fuels inflation, the arch-enemy of fixed return assets like Bonds, which home loan rates are based on.

So a word to the wise – if you or someone you know has been ready to move forward to buy or sell a home, there’s no time like the present. Be sure to get in touch with me or your preferred Realtor, so we can explain your options and help plan a great strategy to buy or sell your home.  

I see most of the investors for Austin real estate wanting to buy foreclosure or short sale properties. We had one deal on a listing in Circle C that was owned by Fannie Mae and they initially accepted a low offer, but then they kicked it back and rejected it. I guess they weren’t ready to go that low on it. Still a lot of investors want to know where these Fannie Mae homes are around Austin. Here’s a direct search link to Fannie Mae….

 With all the national news about the huge increase in foreclosures around the U.S. we are starting to see some signs of it in the Austin-Round Rock areas. According to a article in the Austin Business Journal . We see a big jump in foreclosures but it doesn’t mean we are experiencing a trend yet. The next few months will tell us if Austin is trending towards a market where foreclosures are on the rise. There are some foreclosures experts who believe this rise will continue. We’ll track it here to see what happens.

February foreclosure postings in the Austin region jumped 56 percent over last year, according to a report from Addison-based Foreclosure Listing Service Inc. A total of 832 foreclosures were posted for the February 5 auction, up from 535 in February 2006. Of the area counties, Williamson saw the biggest increase in foreclosure activity, rising 98 percent year-over-year to 301 postings. Travis County was up 38 percent to 403 postings and Hays rose 57 percent to 83. In the first two months of the year, postings were up 21 percent compared with 2006 to 1,389. George Roddy, senior vice president of FLS, says some of February’s surge can be attributed to the fact that the January auction occurred on New Years Day and consequently some postings were delayed. But Roddy says that would only account for as much as 15 percent of February postings. But Roddy says it’s too early to predict whether February’s surge is an anomaly or a harbinger of what’s ahead. “One month does not make a new trend,” he says. “We need to watch the next several months carefully. However, I believe we will continue to see foreclosures at high levels for some time and that we will periodically see these types of extreme surges.”
[Austin Business Journal]

In an article published the day after Christmas in the Austin American Statesman showed that Austin is one of the top markets for buying undervalued real estate. This is compared to the rest of the country where many markets are overvalued with their home prices. Investors should take note that Austin is still a good place to buy homes because they are going to see solid appreciation.

Austin and other markets are among the most undervalued in the nation, according to a new analysis of data by Global Insight Inc. and National City Corp.

The companies looked at prices in 333 metro areas in the third quarter of 2007. Such reports are considered important indicators of potential decline and growth in specific cities.

In calculating valuations, the companies used a complex statistical model that included prices, interest rates, household incomes, population density and any historical premiums or discounts for each market. The percentage of over- and undervaluations is intended to reflect where a housing market’s price should be.

In Austin, and in Texas overall, recent rapid increases in home prices never occurred, so the state has avoided the real estate bubble that has plagued coastal areas.

If a city’s housing is over- or undervalued by up to 14 percent, it is still considered within a fair market range. Anything outside that range means a considerable over- or undervaluation.

For instance, Austin, at -9.1 percent, is in the fair market range, while Dallas, at -28.1 percent, is considered undervalued.

The writers of the report, “House Prices in America,” caution about overinterpreting the data. For instance, though homes in Bend, Ore., are overvalued by 70 percent, that does not necessarily mean prices in that city are expected to fall that much in the near future.

As you can see Austin home appreciation increase almost 29% over the past 5 years. That is due to the job market increasing and being stable. Job growth continues at 4-5% with the unemployment around 4%. This area is becoming a destination for many people as the population growth has increased especially in the over 50 range. More and more retirees are moving into the Austin area.

I think we will see this continued growth pattern in the Austin area because of all the things Austin has to offer. Lakes, the Hill Country, the music scene, laid back lifestyles, and nice people.

Every week I run into people who think the real estate in Austin is going to tank. That’s not likely to happen during 2008. I think people are over reacting the national home news with all the increase in foreclosures and price drops. In Austin I think we are seeing a lull in sales and an increase in the amount of homes for sale. The Austin Business Journal reported recently one the top builders here (Centex Homes) decided not to build a 1,400-home community in north Austin. (Read the Centex full story here)

Here is a re-cap of last week’s real estate market:

December 9 – December 15, 2007
(compared to the same week in 2006)

There was a 28% increase in number of homes for sale. Buyers now have more homes to choose from in the market.

The number of homes pending (under contract) is down 63% from the same time last year.

The number of Homes Sold is down 44% from the same week last year. There  are less sales happening right now then last year.

As for Average Prices: Dec. 9 – Dec. 15, 2007
(compared to the same week in 2006)

The “New Listings” average list price for a home increased 21% to a little over $300,000.  We are still seeing home sellers be too overzealous in pricing their homes on the market. Sellers need to have their home in top condition and be priced competitively to the competition if they want to sell their home now.

The Sold average closed sales prices increased 13% to $274,000.

The Austin economy is doing fine with good job growth and prices here are still relatively cheap compared to many other parts of the country. Anyone looking to sell a home now should be glad that that the builders are pulling back. Right now national home builders are downsizing and delaying their projects because of the decline in housing markets across the nation.

Here is the weekly Austin real estate update for week of November 18-24, 2007. This information is provided by Alamo Title which offers excellent resources for buyers and sellers.

From this chart we can see that the number of withdrawn and expired listings has risen over the month of November. This is because sellers have overpriced their property and are not in good condition. Homes are selling quickly in Austin if they are priced in the market range. Most of the expired and withdrawn listings are priced over $350,000. Homes priced under $250,000 are selling quickly if they are priced right and are in top condition.

Sellers hate to drop prices, but as we are now seeing an increased number of failed sales attempts in Austin, because Buyers are saavy enought to see when they are not priced right.

Overall during the past week listings have increased to 613 compared to 350 in the same week  in 2006. The number of Sold properties dropped. There were 155 sales in this week and in 2006 there were 386. The number of Pending sales remained equal to last year at 330.

The number of active listings are up 25.61% this week over the same week in 2006.
New listings are up this week, while pending and sold homes are down compared to sales for the same week in 2006.Please review the numbers and browse our site for additional information on the current market.

While the weekly numbers only give us a narrow view of the market, our analysis is that while the overall numbers of sold homes is down from last year. The average sales price is still rising. However there are more homes for sale and that will have an impact on the pricing for areas where there are a lot of homes for sale. Sellers are still to price their homes so that they are 10-20% below the competition if they want a quick sale. Buyers can have more leverage in areas where there a lot of homes for sale.

While not without its challenges, the Austin housing market is “probably the brightest spot in the national housing market,” according to a new-home market research and consulting firm. When Residential Strategies, Inc. (RSI) reviewed the numbers for Austin going into the fourth quarter, the one statistic that stood out was the 2-month supply of finished vacant housing on the market at the current slowing sales pace. “This is terrific news,” said RSI, whose Austin partner is Mark Sprague. 

Today the Fed announced its second consecutive decrease in rates, cutting another 0.25% from the Fed Funds Rate. This change could directly impact millions of American borrowers.Are you one of them?

Adjustable Rate Mortgages
If you currently have an ARM that is scheduled to reset in the next 14 months, then today’s news is good for you. Now is the time to investigate your options. Even if you have a pre-payment penalty or you’re behind in your payments, don’t delay. There may still be options available to get you out of your ARM and into a mortgage you can afford, including FHA or the new FHASecure program introduced by the President.

Important: The FOMC does not meet in November, so ask yourself this: Can you really afford to roll the dice until its next meeting in mid-December?

Buying at the Bottom of the Market
We know many buyers are waitng for prices to fall here in the Austin, Texas real estate market. But we aren’t seeing a market that is declining on pricing. If you’re looking to invest in real estate in the next six to twelve months, and recent rate cuts have inspired you to start taking action, now is the time to prepare yourself for intense credit scrutiny. There are a lot of great real estate deals to be had today. But if your credit doesn’t stand up in today’s tight-fisted credit environment, then you could easily miss out on an exceptional opportunity.

What’s the point of taking advantage of discounted home prices if you can’t qualify for the right mortgage or interest rate that makes it all worthwhile? Get pre-approved now and know exactly what you can afford. And with the right REALTOR® on your side, you can have incredible negotiating power especially if in area of Austin has a lot homes for sale!

Refinancing – Know Your Options
While rate cuts often spark ideas of refinancing, this may not be the best choice for everyone. In some cases – especially in a market where home values are declining – refinancing may be impossible or disadvantageous. Contact us for a free mortgage review. Based on your individual goals and financial needs, we can explore every available option for you and your family.
 

The number of active listings are up 25.04% this week over the same week in 2006. New listings are up, while pending and sold homes are down compared to sales for the same time in 2006. We had 9,123 active listings during the same time in 2006?  Today there are 11,407 active listings!  That is a 25.04% increase from 2006.Recap for September 2007 
New listings are up by 19.21%. (compared to the same month in 2006) Pendings were down 22.96% and the # of Solds decreased by 29.17%.

As for Average Prices in September:

The “New Listings” average list price was up 19.58% to 317,707.

Sold average sales prices increased 12.67% to $253,062 compared to $224,614 in 2006

So how does this affect home sellers?  You will need to find out how many “Months of Inventory” are in your area and how quickly homes are selling and in what price range. If you are competing with a large number of homes for sale you will need to price your home about 20-30% below the market range to sell quickly.

The number of homes sold in August 2007 fell two percent from a year ago to 2,645.

The median price increased 7 percent from July 2006 to a record $190,000.

Homes remained on the market an average of 55 days, down 7 percent from a year ago.

Active listings increased by 13 percent from August 2006 to 9,451, while new listings fell by 2 percent to 3,670.

Townhouse and condominium sales rose, with July’s 333 sales representing a 17 percent increase from one year ago.

The median price for townhouses and condominiums rose 36 percent from last July to $180,000.

Central Texas’ market for existing single-family homes remains healthy, according to the most recent MLS report from the Austin Board of Realtors.

How is the Surrounding Austin Real Estate Market Doing? For the most part our real estate market is still doing pretty good.  Our local economy continues to thrive, our job market is good, and people are continuing to move to the surrounding Austin area.  Though, it’s important to keep track of all factors.  I do know a lot of consumers that are really frightened about the National market.  It is a very fair concern, it is just really hard to pull out some negative numbers for our local real estate market.  The best I could do was a 2% decline in June 2007 from the record year of June 2006.  But that number should be expected and actually great for long term health of our market as we continue to have a lot of sales and buck the National trend.

School is back in session now so our September will obviously be a lot slower than the summer months as this happens every year.  However, I’m guessing our September will be plus or minus 3% of last year’s September.  We have had a lot of over priced listings on the market because out of town buyers were coming in and buying what was thought to be a bargain to them.  Now coming into the fall season, I anticipate a lot of sellers to drop their price to at or just below the true market value. 

 And you can bet there will be some good buys on new home inventory homes and over anxious buyers toward the end of the year.One legitimate concern for us is what is going to go on in the lending business.  It is becoming harder and harder to buy 0 down and for sub prime borrowers to get loans.  Always note if you are talking about the real estate market or the stock market, the market generally tends to over correct and in the long run is a good thing.  There are still plenty of buyers out there in our area that are not having problems getting loans. 

If you are a seller and accepting a contract, you’ll really want to make sure and figure out what you can with who the buyer is, how much they are putting down, and their terms.  There is never a guarantee but this will help.  In response to all this the Feds did lower the interest rates a half a point to keep our economy moving.

Some people are really concerned about what our local real estate market is going to do. To me the main indicators to watch are our job market and city growth.  As long as our area continues to create jobs, be a great place for businesses and commercial units, and we continue to grow and expand we should continue to have a good to strong market.  If the entire National economy takes a massive hit for whatever reason we will feel some of residuals of that.

If your plan is to buy a house for your family or to make a long term investment in real estate, the odds are probably in your favor you’ll do great in the long run in a lot of our areas.  I have also had a lot of Clients recently pull off some truly successful flips which is also getting harder with lending regulations, but it can still be done.  If this is a short term strategy of yours (and yes it can still be a great one) you’ll really want to dig into the numbers of the area of where you are looking and make sure you hedge your short and long term bets so you can protect yourself and your family.  You can really make a lot of money in real estate investing, but do not try to do it all in one day or one year.  A good 10 year, 20 year, or 30 year plan is where most people are successful.  A get-rich-quick scheme isn’t going to give you long term stability and true long term wealth.  Millionaires are made by making decisions as part of their long term plan which includes short term decisions and long term decisions and when to do each.  16% of millionaire’s holdings are held in real estate.

With that said, there is an abundance of evidence in the numbers that shows our market as strong and continued strength.  However, it is wise to keep close track of our local indicators and any National disasters that might really impact the state of our local real estate economy.  2008 is projected to do well again but the next several months should have plenty of indicators.

Oh, and one last thing.  Always note with every down fall there is opportunity.  There are many subprime borrowers that can no longer get loans.  To me that means two things.  

1) The market is over correcting and it may be like that for a couple years and to me that can be a good thing.  Getting back to having to put money down for your house and/or having credit will help strengthen and stabilize real estate markets – especially the over inflated ones on the East and West coast.  

2) For those investors, there is an opportunity as there are thousands of people that were ready to buy a house that can no longer do so.  That could potentially open a lot of doors for the investor looking for a potential long term lease, owner financing, lease/purchase deals, etc.  Always look in changing times for the opportunity.

Austin, TX home prices have appreciated over 10% in the last year and over 29% in the last 5 years according to the 2^nd Quarter Analysis of Home Prices and Appreciation Rates released by the Office of Federal Housing Enterprise Oversight. www.ofheo.gov   

U.S. home prices were 3.2% higher in second quarter compared with a year earlier, the slowest price gains in 10 years. A year ago, the year-over-year gain was 10%. After adjusting for inflation of about 2.1%, real home prices rose 1.1% nationally in the past year.

Five states showed lower prices over the past year: Nevada, Michigan, California, Massachusetts and Rhode Island.  Utah had the best gains at 15.3% in the past year, followed by other states in the West and Southeast.

The 20 best performing areas for home price appreciation are shown below. Next, the bottom 20 metro areas are shown, followed by a link to comprehensive data on 300 Metro areas.

Bottom 20 Metro Areas For Price Appreciation

And HERE is the link to the comprehensive data on 300 Metro (MSA) areas.