Austin home prices will increase in 1Q11

Austin home prices are anticipated to reach bottom by yearend 2010 according to a recent report released by the leading global provider of financial services technology solutions, Fiserv.  The report analyzes home price historical trend data and forecasts for more than 375 U.S. markets based on the Fiserv’s Case-Shiller Indexes, which is owned and generated by Fiserv, data from the Federal Housing Finance Agency (FHFA) and Moody's Economy.com.   

 

Austin is expected to have experienced a price decline of less than 5% from peak to trough as shown on the table below.  This fairs much better than most of the country (see photo).  However, prices are not expected to return to previous peak levels until the beginning of 2016.  

Austin Foreclosures Are on the Rise

March has1,038 properties posted for foreclosure indicating an increase of 26% from March 2009's postings.  In the 1st Quarter 2010, 3,958 foreclosures have been posted, which is 36% higher than the same quarter last year.  However, in last month's foreclosure press release, majority of the postings are repeat foreclosures from 2009, so the percentage increase is an overstatement of the actual situation in Austin. In addition, when comparing the amount of foreclosures to the total volume of homes in Austin, the increase in foreclosures is relatively insignificant as there are too few foreclosures occurring for prices to be affected at the masses.  Residential real estate appraisers have reported that you'll find certain neighborhoods, usually first-time and low-income home-buyers, that you can find some modest decrease in price (up to 10%), but for the most part, home sale prices have remained relatively stable during the recession when compared to the nation.

At the end of 2009, the Austin MSA had an total household count of approximately 614,640. If you annualized the first quarter's postings and divide it by the total number of households, you'll see that the annual foreclosure rate is about 2.5% (rounded down since household counts have gone up slightly in the first quarter).  While some my consider this extreme, it is far lower than most metros have indicated.  Below is a breakdown for the March 2 auction followed by the realized percentage increase from March 2009:

Travis County: 667 postings; 23%
Williamson Count: 403 postings; 23%
Hays: 151 postings, 51%
Bastrop: 78 postings, 30%

Home-Buyer Behavior

More good statistics released by NAR:

This is why I’ve become a big advocate for social media campaigning.  If they see an agent on the internet, and you provide the best market data and listings, they’re going to go with that agent.

Austin foreclosures increased 39% in 2009

According to RealtyTrac Inc., a respected foreclosure brokerage and research firm, about 1.25% of all single-family housing units or 1 in 80 homes in Austin were foreclosed in 2009 effecting 8,002 homeowners.  Las Vegas took first place with one in every eight homes filing for foreclosure (12% of all housing units). Austin ranked lowest of Texas’ major cities at 117 out of 203.  Dallas-Fort Worth ranked 94^th at 1.5%, San Antonio ranked 109 at 1.31%, and Houston ranked 111 at 1.3%.  The country averaged at 2.21%, a 21.2% increase from 2008 and 119.7% increase from 2007.  The following chart shows foreclosures for all of Texas.

The following graphs categorize foreclosures by estimated market value, square footage, and number of bedrooms respectively.

 

All of the previous data was provided by RealtyTrac.

Single-family home prices

Texas A&M's Real Estate Center constantly updates their MLS sales data on a monthly basis. The link associated with this post shows the data I extracted to make this chart. Below is a chart that shows the average and median sale prices of existing homes for the past five years. I've added in a trend line and the slope equations for each. The dotted green lines are forecasts of the average and median home price values in January 1, 2011. The average price model indicated a correlation coefficient of 0.44 while the median price model indicated a much stronger relationship of 0.66.  Therefore, the projected median sales price of $200,959 is a lot more credible than the projected average sales price of $256,705.