Vikki Goodwin’s Austin Real Estate Weblog

With all the negative news going around, I’d like to reveal something positive, and that is the average sales price of an Austin home is higher now than ever before, at $262K.  Given the higher inventory and decline in sales, this is a little surprising.  However, another important factor is this – new construction starts are down 70% from a year ago.  That’s a huge change that is helping the resale housing market here.  

The primary explanation for the higher average home price is that we still have an influx of people coming from higher priced markets – such as California, Florida and New York.  Our labor force increased from 849K in Aug. 2007 to 870K in Aug. 2008, according to the Greater Austin Chamber of Commerce, and I know some of that increase is due to people moving in from out-of-state.  I expect this to continue through 2009 at least.  After all, besides having cheaper houses, we also have cheaper gas, and a lower cost-of-living overall.

Another explanation for the increase in the average sales price is that buyers continue to want larger and fancier homes.  While a 1700 square foot house used to work for a family of four, with all the things we acquire, that same 1700 square foot house gets crowded fast!  The average size of a home continues to increase, and the materials we put in them tend to be more expensive. 

My forecast for the coming year is that the average price will remain stable, but it will be more and more of a buyer’s market.  If you plan to sell, you will need to spend more time preparing the home, rather than just putting it out there on the market.  Repair items left undone will ensure your home sells slowly, not at all, or for below average price.  A properly staged home, on the other hand, will sell more quickly and for more money.