Austin follows national home buying trends

Published 7:03 am Tuesday, August 31, 2010


Austin’s housing market may be reflecting the negative trends the nation has experienced since the end of the home buyer tax credit.

Nationwide, the number of existing-home sales were “sharply lower in July” than they were in June, according to the National Association of Realtors. NAR does say that home prices are up, however.

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Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July. That’s down from a downwardly revised 5.26 million in June, and are 25.5 percent below the 5.14 million-unit level in July 2009, according to the National Association of Realtors.

“May, June and July had been fairly slow,” said Brian Blecker of Blecker Realty in Austin, who considers houses prices to have been fairly flat over the last few months.

That slow pace hasn’t helped the interests rates.

Blecker said the foreclosure prices continue to decline in Austin and that buyers of foreclosed homes are basically getting bargain prices. Blecker currently has about six houses that he “just cannot get sold.”

The drop in July sales compared with June was the worst in the Midwest, at 35 percent. Sales sank 30 percent in the Northeast, 25 percent in the West and 23 percent in the South.

However, certificates of real estate show that from April to August 2010, 95 houses were sold in Austin. During that time frame in 2009, only six more houses were sold in Austin; the property values were very similar, too. Yet many of these 2010 sales include buyers that fell into the extension of the tax credit to September 2010 because they were already in the process of purchasing a home. The rate of “new” sales is still slow.

But beyond geography, the sales numbers vary depending on the price of the home. The biggest drops in sales are among homes in the low and middle price ranges. For example, 47 percent fewer homes in the Midwest priced between $100,000 and $250,000 sold in July, compared with July last year. By contrast, sales of million-dollar-plus homes in that region actually rose slightly year over year.

Since the end of the home buyer tax credit, the number of homes lingering on the market has swelled to nearly 4 million in July. At the current pace of sales, it would take about a year and two weeks to sell all those homes and get them off the market. A healthy level is six months.

Austin currently has about 250 residential-area homes for sale, but they are selling quite slowly, according to Blecker.

However, Charlie Fawver of Fawver Agency said that it is still a very good time to buy a home, as interest rates are still very low and mortgagees are very good.

“This market will not last forever; so at some point, it won’t be as advantageous for buyers,” Fawver said.

Yet Fawver acknowledged that the market is “fairly slow,” and he said housing prices mostly remain the same.

Neither Blecker nor Fawver are aware of any future-government programs to aid the housing market again.

Associated Press contributed to this report