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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I chose a location in the heart of one of Austin’s fastest selling zipcodes – Dick Nichols park in 78749. This area had some of the shortest times on market anywhere in the US in 2008, so I wanted to check out the pricing distribution.

My method was simple – just look at 2008 sold data in the MLS for a an area within a 5 mile radius of the center of the park. The median sales price for this area in 2008 was $222, 750, with a high price of $3.4m.

This chart shows the price distribution:

As you can see, there are very few homes below the $100,000 mark, but that the largest home price band is aroun $180,000.

Useful resources:

• What’s my Austin Home Worth?
• see Austin TX Houses For Sale
  
• Contact an Austin Real Estate Agent

Austin MLS Area 10S is the area between Mopac to the West and I35 to the East. To the North is William Cannon and Slaughter Lane is to the South. Let’s take a look at sales in the area in the last five years.

On the left we see that the rise in average sold prices has slowed down in 2008. The area is still outperforming Greater Austin.

The chart on the right shows the decline in home sales in far South Austin in the last two years.

In 2008 a similar number to 2007 homes that were marketed did not sell. The proportion of listings expiring or withdrawn was higher due to the smaller number of sales.

Statistically, it was harder to sell a home in 2008 than it was in 2006 or 2007.

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