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Austin Real Estate Market Update

Is it good to be in Texas or what?  Forbes recently compiled a list of the top US cities for future job growth and Texas dominated the list with nearly half of the top 20 cities located in the Lone Star State.  On a list composed of only large cities Texas was even more dominant taking the top five spots with Austin in first place.  Even in the down market of 2008 Austin saw a 1% growth in jobs.

So did you get a chance to hear us on AM 590 discussing how to effectively fight your taxes?  Click here to hear a podcast of the show.  Also it is time to file for your homestead exemption if you have not already done so.  Click here to get a copy of the form, which also includes exemptions for being over 65 and/or handicapped.

The number of home sales in Austin fell from 18,702 units in 2008 to 17,409 units in 2009; a 7% decrease.  Additionally, the average sales price fell 2%; from $255,431 in 2008 to $249,978 in 2009.  Current home inventory stands at 5.4 months.  6.5 months of inventory is considered a balanced market.  With the supply of available homes dwindling new home builders have responded with a flurry of new home starts to meet the growing demand.  Expect home builders to continue to ramp up construction as we enter the more active months of spring and summer.

Currently, 30 year fixed conventional home loan rates are hovering just over 5%.  The Fed, which has allotted $1.2 trillion of our tax dollars for the purchase of MBS (mortgage backed securities) will end the program March 31st.  These purchases have artificially lowered home loan rates.  The conclusion of this program along with the inflationary pressure of our growing debt will have an adverse effect on mortgage rates as we enter the second quarter of 2010.  A 1% increase in a mortgage rate decreases buying power by 7 to 10%.

Finally, the first time homebuyer tax credit has been expanded to include current homeowners as well.  Qualified repeat homebuyers can receive a tax credit of up to $6,500 on the purchase of a primary residence under contract by April 30th and closed by June 30th. 

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