There’s so many predictions flying around on Austin’s economy: rising interest rates, will the increased rates scare off buyers ? what effect will the new administration have on real estate ? how will the stock market be affected ?…the list goes on and on!
After reading many forms of news on and off line….I shined up my crystal ball. One premise keeps running through my mind sitting here in Austin, Texas…. we are job creators! Whether we want our population to increase at its current rate or not, we don’t have a choice or a way to stop it. As long as people move here to fill these positions they will need housing. We are certainly not immune to a downward in the real estate market but some common sense needs to prevail in interpreting the data.
I subscribe to the Austin Letter written by Neal Spelce, retired from TV news and award winning journalist. He is an authority on Austin and I look forward to reading what he has to say. In his recent letter he asked some interesting questions and I feel comfortable in chiming in with my own answers:
Will interest rates move downward again? Not probable!
How high will interest rates move upward? 4-5% range.
Will buyers purchase in Austin? Yes they will buy…… incentivized due to predicted rising interest rates. They will want to buy sooner than later. The problem in Austin is low inventory (only 3 months) so they may have to settle and take what they can get, if they want a home.
What will sellers do in Austin? Not as likely to move because they have a good interest rate on their home. They will think hard before giving up their comfortable payment. One of the reasons for our low inventory..sellers don’t know where they will go.
Will the hot market in Austin continue at its current rate? There will be a slight dampening for first time home buyers. I don’t see it affecting repeat or higher end buyers, at least not in 2017.
Will homes prices continue to rise in Austin? Absolutely..high demand and low inventory. However they probably will not rise as quickly as in the past and we will see more controlled price increases.
Will the % of increase in Austin home prices begin to level off? Absolutely as long as the affordability differential from where buyers are moving continue to decrease. Right now many moving to Austin find it more affordable than where they are living so are willing to take the plunge and purchase a home, if they can.
Many expect the wage growth to increase in 2017. Even with the increase in interest rates everyone needs a place to live and will try to find a home within their means. Austin’s real estate market will flourish at a more controlled pace but will continue to flourish! There is no better time to buy in Austin! That’s a wrap folks!!