In recent weeks, I have been asked often, “How’s the terrible Austin real estate market going?” or “It must be tough working in this market, huh?” I wanted to address these questions.
Thankfully people have it all wrong. The Real Estate market in Austin is strong. In 2001 and 2002 we had our real estate recession. After that we’ve had stable appreciation year after year while the rest of the country went crazy. This stability has paid off. While the bubble has burst in other places, in Austin, the bubble never formed -- so there was no bubble to burst!
The chart in the attached document shows a mathematical average of all of the homes which were transacted under the MLS of the Austin Board of Realtors. Resale prices have appreciated 6% over last year. Before that it was a little less and before that, even smaller. 6% appreciation is actually a little fast for Real Estate. Normally, we like to see something a bit closer to 4%. But 6% happens. Compare that to the 20% or more appreciation figures you probably heard about in places like Los Angeles. 20% is a bubble, 6% is “growth”.
Some micro-markets around Austin have experienced extremely high appreciation in the last 3-4 months. One area of notable interest is Cedar Park and Leander. In a Leander subdivision called Block House Creek, if you take an average – it’s about a 10% bump. That’s extremely fast for Real Estate. While no-one can say with certainty why this has happened, we’re all guessing that it’s most likely due to the new highway and the planned development for the area which includes a Cinemark, 2 light rail stations, a Super Target and an HEB-Plus.
There are other micro-markets which are going through some hyper-appreciation. East Austin is another famous one. Despite those, overall, Austin remains a strong, stable market.