Well, I'm actually a Californian who went to UT and grew up in Texas. I recently decided to buy a place in Austin, a place I love dearly. So, the first thing I did was go to my favorite website, zillow.com. For those of you who don't know, Zillow provides lots of great information about individual properties and most importantly, sales data! Zillow actually uses an algorithm to estimate home values. (called a Zestimate) I've used it lots in other states and it provides useful information. I recently sold a place in CA and it was within 2% of the Zestimate...this was in a very volatile period of prices too.
Low-and-behold, there were no Zestimates for Austin. Hmm. It turns out that realtors in Austin hate losing control of the information and won't give it to Zillow. They hide behind this story of protecting client confidentiality. (Though they will give you the information if you ask for it?)
Anyway, I did locate a very helpful realtor, Paul Smith of Prudential, via Zillow and spent the next month looking at dozens of properties. My impression of the market was that, in the 400k plus market, 80% of the listings were above the market price. Many properties have been sitting on the market for over 2 years.
Now why would sellers think they can sell their homes at a 2007 price when we know prices have fallen considerably. Why would realtors take these listings? Are the realtors afraid to tell clients that prices have fallen? Are realtors afraid to establish new comps in some neighborhoods?
You can see here that prices are falling precipitously now. So, the question is, will they fall further?
Here's my theory as I wrote to my realtor today:
"I know you don't agree but I think Austin did have a significant run up in prices from 04-07 that was related to what went on nationally. I also think that, like here, your prices will fall back to the 04 level as the economy continues to stagnate, rates rise, government incentives are withdrawn, and bank foreclosures flood your market. I primarily talking about the 600k and up market."
Oh, by the way, I made an offer to a bank on a property in Lakeway that was a foreclosure. Despite that fact that this house had been on the market for a YEAR, they declined. On another trip I made an offer to a builder (Ryland Homes) that ended 17k apart at the last minute. That was in Lakeway too.
So that's it. This blog will serve to witness my theory and hopefully coax the real estate industry to be more transparent and honest about prices. In the end, price is everything.