Across the country, most major metropolitan areas are seeing home prices continue to drop. In fact, housing values are down 20% from their peak nationwide. Housing prices in Austin, however, never experienced the same loss of value. While inventory remains high and sales volumes have dropped — April 2009 sales were down 33% from the peak April 2007 volume — prices have remained amazingly stable.
Today, one major index of home values reported that Austin home prices actually increased by 2.2% in March, 2009 over the year ago period — a very positive development for the Austin market. In the same index, nationwide prices were down by 11.5% during the same period.
Why has Austin stayed strong? There are three reasons:
(1) Austin never experienced bubble-like run up in values during 2006-2007 that many other markets experienced
(2) Austin continues to see strong net inbound migration which helps stabilize values
(3) Austin employment has remained strong. Amazingly, the most recent data shows a decrease in the local unemployment rate.
As a result, Austin continues to be one of the strongest real estate markets in the country.
Here is a summary from the Austin Business Journal:
According to First American CoreLogic’s Home Price Index, 33 states saw home prices decline at a faster rate in March. However in the major Texas cities, including the Austin-Round Rock metro area, prices increased. In the local area prices rose 2.2 percent in March compared with March 2008. That’s down slightly from the region’s February home price increase of 3.2 percent compared to the previous February.
Housing price declines are slowing in states that have seen the highest declines in the past three years, but prices are dropping faster in states that have seen only moderate decreases in that time period, the research found.
Nationally, housing prices fell 11.5 percent in March compared with the same month last year, down from an 11.7 percent annual decline in February.
The number of states with double-digit annual declines has doubled in the last year, according to the index, from seven states in March 2008 to 14 states this March.
Nevada remained the top-ranked state for annual price depreciation in March, with an average home price decline of 26 percent. California followed close behind with a housing price decline of 25 percent compared with the same month last year. Rhode Island, Florida and Arizona round out the top five.