A story in the Austin American-Statesman covers the release of July resales data for the Austin area. Writer Shonda Novak reports that July sales were about 32% higher than July of last year. Bear in mind that the Federal Housing Tax Credit expired in June of 2010, causing an artificially lower sales result for July, making the comparison to this July seem unduly rosy. The number of sales in July represented a decrease from the previous month, illustrating the impact of the tax credit expiration.
In the article, Mark Sprague, Director of Business Development at Mission Mortgage, comments on the market in Austin, saying “Record low mortgage rates and affordability, stable values, and good job creation continue to be a blessing to the Austin market.”
By way of comparison, the national results for July showed sales of existing homes across the U.S. dropped by 21% when compared to July 2010 and 3.5% compared to June 2011. The impact of the tax credit is similar to what we saw locally.
The local market experienced 1,973 resales in July 2011 while inventory shrunk to 9,393. The drop in inventory from the previous year of 20% is also a product of the tax credit. While the tax credit was available, more home sellers put their homes on the market in the hopes of the tax credit helping them to identify a buyer. When the credits expired, many of the homes went unsold and the holdover inventory would have made last July’s results artificially stimulated to higher numbers. As a result, the comparison to this July’s inventory shows a larger drop than would have naturally occurred.
Sprague was quoted further along in the article, providing his practical and straight-forward approach to clarify the quality of the Austin market. He continues to stress that we are in a good place and we are fortunate to be avoiding the troubles that are challenging the overall U.S. economy.
To read the full article, including all of Sprague’s quotes, please click here.