One of the most common questions I get in real estate is, "How did you get eyes as blue as the sky?" Well, God gave them to me. He's nice. The other day he told me the secret of how toads got their warts and we laughed and laughed. Then we went swimming and played jokes on each other in the water. God didn't want to get in right away because it was a little chilly, so I tried to pull him in and he just hovered over the surface and walked off the water to shore. Then he parted the waves, walked down into the water valley, grabbed a fish out of the liquid wall and slapped me with it. We shared a good chuckle with that one. He can be quite a creative prankster. I love that guy.
The second most common question is, "How is the market doing?" The answer to this question depends on whose asking. If you're a buyer, it's phenomenal. There really will not be a better time to buy in our lifetime. Interest rates are at record lows, property prices have fallen dramatically, and the government is offering tremendous incentives. The first part of the investment adage, "Buy low, sell high" is definitely good advice right now.
Real estate is cyclical. If we look at this graph showing median home prices in Austin over the past year, around August 2009 we've seen a continuous drop of about $50,000. It has now leveled out to some degree and I expect it to rise steadily over this summer again, as the summer season is traditionally the most active time for sales. More people want to sell and more people want to buy during the summer. It's warmer and easier for moving and is the optimal time to get your children into a new school.
If we look at Round Rock things are a little more like falling down the stairs. However, both were trending downward and seem to have reached their bottoms. Round Rock had this kind of temporary level out in November because that's when there was a rush to close on homes before it was announced that the tax credit was extended. More homes sold because there was more scrambling and pressure on the buyer's to not procrastinate and be decisive on a smaller inventory of attractive homes. Hence, the sellers' of those homes were more likely to get what they were asking for. Round Rock has a lower average sale price than Austin, so it was more affordable for the majority of the first-time home buyers.
It is the same case in Cedar Park. Average home prices are lower so we see the same little leveling out in November because of the first-time home buyer prevalence.
Although median home prices have dropped, I expect them to go back up again through the summer, as is typical. Despite single family home prices dropping, properties are still selling. Make no mistake about that. The average days on the market is up, so it may take a little longer to sell your house, but properties are still selling and if the product is good and in a desirable area, we're still seeing homes sell in the first two weeks. The important thing to remember is that although things are a little down from 2006-2007 in the Austin metro area, we haven't seen nearly the drop as the rest of the country. Austin has been resilient to say the least.