Image by cackhanded/flickr

On September 20^th 2012, the Austin Board of Realtors released an MLS (Multiple Listings Service) report that had great news for those engaging in Austin real estate.  For starters, Austin had its 15^th straight month of sales volume growth. Homes are selling at a fantastic rate with the average time on the market ranging in the low 60s, a significant drop from August 2011 when homes were selling after an average of 79 days on the market.

Homes are selling particularly well in Austin because demand is very high and the inventory continues to decrease. The decrease in inventory does not mean that new homes aren’t surging onto the market. In fact, there was a 15% increase in new homes from August 2011, while at the same time there are 17% fewer active listings and 23% more pending sales. The demand is simply so high that even with the addition of new homes, the total inventory has continued to decrease.

Perhaps the most staggering of statistics can be found in the number of homes sold. In a comparison of August 2011 and August 2012, the Austin market saw an incredible jump of 21% compared to a year prior with a total of 2,400 single-family homes selling this August. Another example of the improving market can be seen in the market’s months of inventory, which as of August 2012 was at a solid 4.0.

So why all the hype about Austin homes? For starters, Austin is constantly being awarded as one of the best cities to live in across the nation. The attraction to the city starts with its low unemployment rate and low cost of living and ends with its abundance of culture and things to do. Austin boasts a favorable climate for those who can sweat it out in July and August. And the economy is more stable than most other large cities thanks to a combination of state jobs at the Texas State Capitol, the growing technology industry and, of course, plenty of annual revenue from the University of Texas, which is located in the heart of the city.

With people flocking to the “Live Music Capitol of the World,” now is a great time to participate in Austin real estate. Austin homes are hot commodities and if the current market is any indication, then now is the time to get involved.

Andrew Hill is a content developer for Reilly Realtors located in Austin Texas. He can be contact at Andrew@reillyrealtors.com

FreeDigitalPhotos.net

Buyer Interest Increasing

In the past buyers were wary of foreclosed properties. Many were in disrepair and offered at a price close to market value, making them a poor choice for owner-occupant buyers who could purchase a comparable home with less needed repairs for just a little more money. In the past couple of years however as foreclosures have become more prevalent in the market buyers are beginning to see the fruits of buying a repossessed home. According to a National Association of REALTORS® survey buyer interest in foreclosures has increased by 159% since last year, with 64.9% of today’s buyers stating that they would likely purchase a foreclosed property.

Decrease in Inventory

Many Americans would be surprised to learn that the foreclosure inventory available on the market has decreased by 34% in the last year. And it’s no wonder: one look at a major news source in a seven day period will surely yield at least one story about the doom-and-gloom of the real estate industry and the economy as a whole. In fact, according to the aforementioned National Association of REALTORS® 49% of people still feel that the rate of foreclosures in their market has remained unchanged since last year.

Who’s To Blame?

Home ownership is a personal thing for people. After all, that’s your home, your castle, etc. So it’s no surprise that when it comes to the touchy subject of people losing their homes the finger-pointing and blame game is rampantly at play. Of those surveyed most Americans blame lenders, followed by the economy and in a close third the government for the current foreclosure rates.

Foreclosed properties, while decreasing in numbers, appear to be here to stay as a fixture in the housing market for some time to come. Fortunately owner-occupant buyers seem to be coming around to the advantages of purchasing one of these properties, which aids in community stabilization. And as interest rates remain at historic lows these buyers have little to lose in making a savvy foreclosure purchase.

Long road ahead for housing markets

Unfortunately, the inventory doesn’t include the so-called “shadow inventory” of both distressed properties and those still held by owners who are underwater, owing more than their home is worth, and at risk for default, according to Radar Logic’s recent “Housing is a Buyer’s Market”

Also unfortunate, bu central to the recovery equation, buyers aren’t getting the boost they need to buy.

Sales up

No doubt, sales of existing homes are up, according to the National Association of Realtors’ (NAR) latest Trend Report.

In January, completed transactions on all existing homes increased 4.3 percent to a seasonally adjusted annual rate of 4.57 million in January, up from a downwardly revised 4.38 million-unit pace in December. The sales pace is nearly a full percentage point higher than the spike to 4.54 million in January 2011.

Chalk up some of those sales to affordability generated by record low interest rates, employment improvements, better-buying-than-renting opportunities and sellers getting a clue.

Sellers wake up

Coldwell Banker Real Estate says home sellers are “getting real” about pricing their homes in the 2012 Year of the Dragon.

More than half (51 percent) of Coldwell Banker’s surveyed real estate agents said sellers are more willing to price their homes competitively than they were at this time last year.

Radar Logic agrees.

“The price and sales trends observed in 2011 are consistent with sellers dropping their prices to meet bids from bargain-hunting buyers,” and that’s eating away at inventories, Radar reports.

NAR said the for-sale inventory of existing homes (single-family detached, condos, townhomes and co-ops) was down by a whopping 22.02 percent in February 2012 compared to a year ago, with shrinking supplies in all but two of the 146 major metro markets covered.

Unfortunately, some of the depressed inventory stems from millions of homes lurking in the shadows.

“Inventories will certainly increase in the coming months, especially in judicial states like Florida, as lenders process and list the huge backlog of distressed properties freed by the recent multi-state attorneys general agreement. The shadow foreclosure inventory is considerably higher than the total inventory on the market today. Unless properly managed, the disposition of such properties could easily undermine the progress that has been made to date,” according to NAR.

NAR reported an inventory of 2.31 million existing homes for sale in January including distressed sales which accounted for 35 percent of sales.

The additional shadow foreclosure inventory is larger, NAR says.

Radar says there’s one shadow inventory comprised of homes held off the market and other homes in the foreclosure process but not ready for sale.

Core Logic says yet another shadow inventory, underwater homeowners at risk of default, is more than 11 million.

Buyers market fear

And then there’s that X Factor – buyers. Potential home buying consumers, not surprisingly, aren’t confident the recovery is here.

More of them will come to market if rents continue to rise, banks loosen up on credit, and more jobs are available.

“Would-be buyers are still experiencing difficulty accessing mortgage financing. While rates remain near record lows, lenders remain risk averse and underwriting standards remain extremely strict,” reports Radar Logic.

“Moreover, buyers remain apprehensive of purchasing new homes given their perception of a large inventory overhang that will weigh on home prices well into the future,” Radar added.