Market Insight

Late 2011 Reports Increase in Austin Foreclosures

Austin foreclosures in September 2011 show increase from September 2010.

Austin: A Rare Buyer’s Market

The buyers’ market in Austin peaked in July 2010. Thereafter, properties dropped from a historical high of 7.9 in July to 5.8 by December 2010, meaning the market was gaining strength. Yet in March 2011 the Austin market reversed course back into a buyers’ market.

It hit a high this year of 7.4 in May and has since been trending lower. At the end of September 2011, inventory was down to 5.8, placing it as a neutral market. Compared with September 2010, inventory is down 21.62 percent, and sales up 28.90 percent, again a good sign that the market is gaining strength.

(Inventory represents how long (in months) it would take to absorb all current listings, if no new homes are added.)

What does this mean? For a bit longer, Austin homebuyers are still in one of the greatest buying windows in history. Lenders with huge inventories of foreclosed homes are offering them at deep discounts to get the non-performing loans off their books.

This oversupply lowers property values universally, so buyers can earn amazing equity on their first home-purchase, especially when considering the mortgage rates currently being offered.

Contact me for a list of such bank-owned homes. Buyer’s choice doesn’t come often in Austin.

Over the past 10 years, Austin has been in a buyers’ market for only 21 months: 2003: 7 months (tech bust) 2009: 5 months (sub prime loans debacle) 2010: 9 months (recession)

Austin’s housing market appears to have the following characteristics:

1.5 – 3.5 months = Hot Sellers’ Market

3.6 – 5.4 months = Sellers’ Market

5.5 – 6.5 months = Neutral Market

6.6 – 7.9 months = Buyers’ Market

8.0 – 9.0 months = Hot Buyer’s Market