Area home sales rise 3%

Increase during September is the smallest in what has

been a record year.

By Shonda Novak, M.B. Taboada
AMERICAN-STATESMAN STAFF
Tuesday, October 24, 2006

Sales of existing homes in Central Texas rose 3 percent in September, the smallest year-over-year increase in what has been a record year for real estate.

Prices also showed a small increase, up just 3 percent from a year earlier, as owners sold 2,341 single-family homes at a median price of $167,000, according to the Austin Board of Realtors. It took less time to sell a home, an average of 58 days, down 15 percent from September 2005.

Pending sales were up 15 percent at 2,332, which suggests October could be a stronger month.

Real estate agents and economists said the numbers reflect the usual seasonal slowing in the market after August but expect the market to pick up again by early spring.

Jim Gaines, a research economist with the Real Estate Center at Texas A&M University, said favorable mortgage rates and the region's healthy job growth indicate that the Central Texas market is in for "a very good 2007."

He said Austin has less than a four-month supply of unsold homes, "which means it's still a very tight market."

Real estate markets have been faltering in other parts of the country, including San Diego, where sales fell 35 percent last month, and the Dallas-Fort Worth area, where September sales were down 15 percent.

Austin is one of the exceptions. Another is Houston, where sales rose 17.8 percent in September.

Through September, sales in Central Texas were up 11 percent from a year earlier, and the median price was up 7 percent to $173,800.

During the first nine months, sales dropped sharply for homes priced less than $120,000, but rose by more than 20 percent for homes priced between $200,000 and $399,000, which covers more than 30 percent of all sales.

So far this year, the biggest gains have been at the very top of the market, including a 56 percent increase in homes costing more than $1 million, though that is about 1 percent of the overall market.

The high-end market has been strong all year, partly because of the influx of newcomers from more expensive markets, including the West Coast.

Don Sembera, an agent with Moreland Properties, said the market remains strong for luxury homes, some Central Austin neighborhoods and close-in suburban developments.

Though there has been a spate of "new price" notices in some listings, Sembera said that reflects homes that "weren't priced appropriately in the first place" rather than market conditions.

"I don't know where we're all headed, but I think we're in pretty good shape in Austin in the next year," he said.

Ginger Auel, a broker/owner of Auel & Associates, said activity has been strong in South, Northwest, West and Central Austin, while East Austin "has gone crazy this year."

Auel said the investor interest in Austin remains strong; about half of her clients are buying one or two properties for investment purposes, with the majority of those buyers Californians.

John Rosshirt, chairman of the Austin real estate board, said some parts of the market "may be relaxing, but only in comparison to the substantial increases we saw earlier this year . . . All indicators show that the Austin real estate market is going to perform well in the long term."