Everyone Agrees: The January Real Estate Uptick
February 25, 2009 22:16 Filed in: Market
Analysis
In conversations with realtors and developers who
focus on downtown Austin, everyone agrees that the
last few months have been really tough. Ever since
the fall economic collapse, the downtown real estate
market has essentially ground to a halt. Surprisingly
enough, everyone also seems to agree that there was a
noticeable uptick in January.
While the AustinTowers | urbanspace Downtown Market Index shows 5 transactions totaling less than $2 million, we have been able to $10 million in downtown condos that was either put under contract or closed. After a very slow November and December, January was a positive surprise.
According to the analysts, price drops and record low interest rates have helped to spur a new round of real estate transactions. January, however, also included a couple of $1 million + reservations in new projects which would not have benefited from reduced interest rates (jumbos are high) or aggressive pricing. While one month does not make a trend, it's good to see increasing strength downtown and across the city. While activity has picked up, it is important to note that prices are not on the rise. Most experts still predict modest declines for central Austin during the first half of the year.
Here is additional reporting from the Austin Business Journal:
A February survey of public and private builders across the country from John Burns Real Estate Consulting shows that Texas saw new home sales, traffic and expectations pick up in January. The survey gathered information from 236 home building industry executives.
“I spent several days in Texas this month and can confirm that the pick-up is real and is driven by lower mortgage rates in an area where home price appreciation was insignificant and the economy is still OK,” said John Burns, CEO of Irvine, Calif.-based John Burns Real Estate Consulting.
However, Burns said, new home prices are still trending downward everywhere, including Texas.
“We look forward to calling a bottom in home price declines, but we are definitely not there — in any region of the country,” Burns said.
According to the survey, current and expected sales improved nationwide, with average net sales per community rising from 1.0 to 1.4 in January.
Starts per community averaged one unit nationally last month, according to the survey. But 40 percent of the real estate group’s survey participants reported zero starts and 14 percent said they were starting three or more units this month, compared with from 9 percent of respondents starting that many units the previous month.
While the AustinTowers | urbanspace Downtown Market Index shows 5 transactions totaling less than $2 million, we have been able to $10 million in downtown condos that was either put under contract or closed. After a very slow November and December, January was a positive surprise.
According to the analysts, price drops and record low interest rates have helped to spur a new round of real estate transactions. January, however, also included a couple of $1 million + reservations in new projects which would not have benefited from reduced interest rates (jumbos are high) or aggressive pricing. While one month does not make a trend, it's good to see increasing strength downtown and across the city. While activity has picked up, it is important to note that prices are not on the rise. Most experts still predict modest declines for central Austin during the first half of the year.
Here is additional reporting from the Austin Business Journal:
A February survey of public and private builders across the country from John Burns Real Estate Consulting shows that Texas saw new home sales, traffic and expectations pick up in January. The survey gathered information from 236 home building industry executives.
“I spent several days in Texas this month and can confirm that the pick-up is real and is driven by lower mortgage rates in an area where home price appreciation was insignificant and the economy is still OK,” said John Burns, CEO of Irvine, Calif.-based John Burns Real Estate Consulting.
However, Burns said, new home prices are still trending downward everywhere, including Texas.
“We look forward to calling a bottom in home price declines, but we are definitely not there — in any region of the country,” Burns said.
According to the survey, current and expected sales improved nationwide, with average net sales per community rising from 1.0 to 1.4 in January.
Starts per community averaged one unit nationally last month, according to the survey. But 40 percent of the real estate group’s survey participants reported zero starts and 14 percent said they were starting three or more units this month, compared with from 9 percent of respondents starting that many units the previous month.