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Market News and Trends

Home prices are up!


Two recent reports discussed encouraging news about home values in the United States:

Home Prices Rise, Putting Country in Buying Mood

US home prices jump in April by most in 7 years

Strength in home prices and in the stock market reinforce the “wealth effect” that leads to more spending, which in turn boosts the general economy.  The US and the world need the growth in demand.

How do home values in Austin and Central Texas compare?  One tool is S&P’s Case-Shiller Price Index, which has tracked 10 cities for more than 25 years, then expanded to a 20-city index in 2000.  Austin is not a “Case-Shiller” city, but I routinely follow sale prices here, and the 12-month rolling average allows a fair comparison to those large indices:

Austin vs. Case-Shiller Indices 2000 to Present

Notice that all three curves were “zeroed” at January 1, 2000, so differences in the way the last market cycle and the housing downturn were experienced are quite visible.  As of March 2013, accumulated price appreciation in the Austin metropolitan area almost exactly matched the Case-Shiller 10-city price index, and exceeded growth of the 20-city index.  The obvious difference was the bubble that burst in 2006, and the much-discussed damage done in the process.

The Case-Shiller indices will be updated for again later this month, but major data provider CoreLogic reports that April home prices in April 2013 were up 12.1% compared to April 2012, and 3.2% over March 2013.  The corresponding figures for the Austin/Central Texas market were 14.5% year-over-year and 9.8% March-to-April.  Here is how Austin-area prices behaved through the most recent market cycle and the recovery, which began here long before most Case-Shiller cities:

Year Over Year Price Change

Click that chart to enlarge it, and you’ll see that the Austin area has seen 23 months of annual price gains.  Note, too, that the worst year-to-year price declines here were in the 8% range.  Compare those to the non-stop slide from 2006 to 2009 in the Case-Shiller cities.

Another bubble forming?  So far that doesn’t appear to be the case.  In Austin and Central Texas particularly, underlying economic and employment growth are tremendous, and with a more stable national economy there is good reason for optimism.

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About Bill Morris, Realtor

More than thirty years of business experience (high tech, client service, business organization and start-up, including many years in real estate) tell me that service is the key to success and I look forward to serving you. I represent both buyers and sellers throughout the Austin metropolitan area, which means first-hand market knowledge is brought to bear on serving your needs: -- Seller Representation is a comprehensive process that begins with thorough market analysis and consultation, continues with properly staging the home to achieve the highest price possible in a reasonable time on market, a complete program of marketing and promotion, ongoing updates and communication, closing coordination, and follow-up throughout (and after) the sale. -- Buyer Representation is also full service: shopping, previewing, price and market consultation, contracting, negotiating, coordination of inspections, appraisals, repairs, and closing details, and follow-up beyond the closing of your purchase to ensure your lasting satisfaction. Because the real estate industry is becoming more sophisticated and challenging every day, you need a professional that understands the industry and is positioned to stay ahead of the game. I go the extra mile to help you achieve your goals. That's why I constantly research the market and property values so your home is priced effectively from day one. I also make sure the public knows your home is for sale by using innovative advertising and marketing techniques to attract potential buyers.

Discussion

One thought on “Home prices are up!

  1. Bravo on the continued great posts.

    The chart on Case Shiller and Austin or any chart and the metros of Texas shows that even with our lack of value loss in Texas, and their dramatic ups and downs, we are just now at he same appreciations they are at………

    Would you mind if I gave you credit for this chart and used your case shiller chart?

    MS

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    Mark Sprague, State Director of Information Capital for Independence Title, is a respected analyst of the real estate and financial industries, and the Austin market in particular. For specific questions about market issues, contact Mark at msprague@independencetitle.com
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