The wider housing market has an impact on the local market here in Austin TX. While it pays to take broad sweeping generalities with a pinch or two of salt, it makes interesting viewing. If you’ve been googling housing market, you’ll have seen this paid advertisement for the Goldman Sachs Housing Market Forecast for 2011.
In it, the managing director of global research Jan Hatzius predicts modest declines in house prices across the US, of the order of 5%. This is pretty significant for most homeowners. He also said that the overvaluation challenge of the housing market bubble of 2006 is behind us, and house values are somewhat predictable right now. Low mortgage interest rates coupled with accurate valuations actually put house values under long term trends, he adds.
So what does this mean? If valuations are accurate and declining in the large, how does this affect the price of an Austin TX house? The overall forecast in my opinion is for the coastal bubble states. Texas has the 32nd largest economy in the world and is seeing growth. People are moving to Austin. State unemployment is low relative to the rest of the US.
The real estate fundamentals of Austin continue to be strong. My forecast would be that there will be no decline in Austin house prices, and modest gains in some key perennially popular neighborhoods: close to employers, close to downtown, and with good schools.
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