July 2008 - Value of Austin homes remains stable.

7/21/08 Value of Austin homes remains stable
Real estate market grows due to first-time buyers and young people in their early 20sBy Mohini MadgavkarDespite home price depreciation around the rest of the country, Austin housing is holding its value.

According to an Austin Board of Realtors study, the median price of single family homes is at $200,000, a 4 percent increase from last June.

"Our homes are affordable in comparison. Less than $200,000 is amazing," said Socar Chatmon-Thomas, chairman of the board. "In most parts of the nation you can't buy anything as a first home for less than $350,000."

Sales of single-family homes are coinciding more with national figures, as they have decreased by 20 percent since last June.

"Austin is a vital and dynamic environment because of business growth," said Beverly Kerr, vice president of research at the Austin Chamber of Commerce. "We're a lot less expensive in terms of taxes and regulation than other tech industry centers … and we're a great place for quality of life."

Forbes magazine ranked Austin as America's third-most "recession-proof city" in April. At 3.7 percent, Austin's unemployment levels are nearly 2 percent below the national average."

Growth in Austin is really driven by the job market," said Chay Walker, senior agent manager at Austin's Uptown Realty.

However, Walker said, Austin's 6 percent unemployment rates in 2001 and 2002 prevented the city's housing market from growing at 45 percent, the highest appreciation rate seen in some parts of the country, Walker said.

"Austin's real estate market stayed flat," Walker said. "When the rest of the country started having problems, our markets were just coming around."

Austin builders responded to the crisis by scaling back production of new homes, Chatmon-Thomas said. Austin housing appreciation continues to hold steady at around 5 percent.

Chatmon-Thomas said some of Austin's real estate growth stems from an influx of Asian-American and Hispanic first-time home buyers and younger buyers.

"A lot more young people are buying homes in their early 20s," Chatmon-Thomas said. "I think it's that younger people realize the value of a home and realize that 'If I purchase this home now, I can use it as an investment property when I get married or change lifestyles or whatever.'"