It's Official: 3% Price Drop, 40% Sales Volume Decline
Existing Home Sales Dive 40% in November
Outlook for 2009 not good; Austin doing better than some markets.
By M.B. Taboada
AMERICAN-STATESMAN STAFF
Friday, December 19, 2008
Sales of existing homes in Central Texas plunged 40 percent last month, the largest decline on record, as the recession and credit crunch arrived full force in Austin.
The 990 sales were the lowest number for November since 1997, according to the Austin Board of Realtors.
And the median price fell 3 percent, the first drop in four years.
Real estate experts don't expect next year to be any better.
Consumer confidence has deteriorated, and while mortgage rates are falling fast, lenders have raised standards for mortgages. That has closed out some buyers who would have qualified under looser standards a year or two ago.
"The consumer is scared to death to buy anything because they are afraid for it to go down in value," said Mark Sprague, Austin partner for Residential Strategies Inc., which tracks the housing market. "I haven't seen consumer confidence this low in Austin since 2001, when we had the Internet bust. '09 will be slower, the slowest we've had since 1997."
Local experts said it was impossible to tell whether the housing market had hit bottom.
"For a while, it looked like Austin and Texas were immune to what's going on (nationally), and that's no longer the case," said John Rees, director of research for Angelou Economics in Austin. "Things are slowing down. Is it going to be less of a downturn locally or will it be delayed with us being the last ones to enter the recession and the last ones to exit it? I don't know."
Charles Heimsath, president of Capital Market Research, said he expected the market to remain slow "through the first quarter of next year, until we get more assurance that the economy is stabilizing."
But he said Austin still is doing better than many other cities, thanks to continued job and population growth.
"Compared to other markets in the country, we are still healthy," Heimsath said. "There are other markets where prices have dropped 20 to 30 percent or more. For us to have a 3 percent decline is really very mild in comparison."
The picture is similar in other large Texas cities. Sales were down 33 percent and prices down 7 percent in the Dallas-Fort Worth area. Houston, whose economy has been healthy because of the oil industry, had a 32 percent drop in sales and a 7 percent price drop.
In the Austin area, the bulk of existing homes that sold in November were in the $200,000 to $400,000 price range.
New listings fell 17 percent to 2,021 in the month, as prospective sellers decided now was not the time to put their homes on the market.
But with the sluggish sales rate, active listings — the number of homes already on the market — rose 15 percent to 9,243.
Through November, sales were down 20 percent for the year, but the median price so far is up 3 percent to $190,000.
The Austin Board of Realtors said it is backing the four-point proposal by its national association to help bolster the housing market. The plan calls for the government to make a $7,500 first-time homebuyer tax credit available to all buyers and eliminate the repayment requirements; to make higher loan limits approved earlier this year for the Federal Housing Administration, Fannie Mae and Freddie Mac permanent; to direct more funds from the emergency Treasury bank relief program to mortgage relief and foreclosure prevention; and to permanently bar banks and banking conglomerates from engaging in real estate brokerage and management.
mtaboada@statesman.com; 912-2942
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