October 2006 Sizzles

AUSTIN (Austin American-Statesman, inman.com) – Central Texas’ housing market posted an October record for both single-family home sales and prices, as homes sold at the fastest pace ever for the month.

Although homes sold in October were on the market an average of 66 days compared with 58 days for homes sold in September, the Austin Board of Realtors’ latest Multiple Listing Service report said the number is still a record low for October.

In the South Austin area that includes neighborhoods such as Cherry Creek and Tanglewood Forest, active listings took about 18 days to sell.

Last month was the tenth consecutive month of year-over-year sales gains, with nearly 2,075 single-family homes sold, up 8 percent from the approximately 1,920 sales last year. October’s median price set a monthly record at $175,000, an increase of 9 percent from approximately $160,500 posted a year ago.

The number of new listings jumped 12 percent during the period to almost 3,075. The nearly 7,950 active listings at the end of October, although down from September, were up 4 percent from a year ago. Pending sales were up 19 percent to more than 2,400.

There are fewer homes selling for under $120,000 so far this year, down 6 percent or more compared with the same period a year earlier. Home sales in the $200,000 to $249,000 price range, however, are up 18 percent.

Austin's real estate market remains hot with no signs of cooling off. Looking at the Southwest Market it is easy to see how commercial leasing rates effect housing prices and availability. The Southwest market has seen a steady increase in commercial leasing rates in 2006 and the October results show the impact on that particular housing sector.

Ice Cream Special

I found out something interesting today. During the winter months, Baskin Robbins offers $1 scoop nights on Tuesday nights between 6:00-10:00p.m. Baskin Robbins is a franchise and each store is independently operated, so not all stores may participate in this program. However, if you call a store near you, my hunch is that they will honor your request and offer you $1 scoops of ice cream. In my opinion, it's a great deal. That's nearly 1/2 off a typical scoop of ice cream. Anyway, use the information for what its worth and remember it's o.k. to have an occasional scoop of ice cream.

"Best Little City in America"

If you think this was said about Austin, Texas, then you would be right. National Geographic Traveler touts Austin as the "Best Little City in America" in its November/December 2006 edition. In its highlights of Austin, National Geographic lists diverse population, endless music, eclectic shopping and regional cuisine as defining factors for its rating. I have to admit, Our BBQ and Mexican food joints are some of the best that I've experienced. This isn't the only National publication to discuss Austin.

In the November issue of Travel & Leisure en Espanol, the magazine names Austin "the secret jewel." The main focus of this article was on our Live Music as the unequivocal difference. Again, I have to agree. Where else can you go to an airport or a local supermarket to hear live music? With over 150 venues for live music, it is hard to find another city that can say, "We are the Live Music Capital of the world."

That's not all, in December's issue of Conde Nast Traveler, Austin will be featured in an article by Graham Boyton, a London based editor of the magazine. He will tell of his experience of South by Southwest and why he feels Austin is a great city to visit.

I must admit, I think Austin is a wonderful city and sometimes I take it for granted. When I hear the National Press rave about my city, I get that "Austin Proud" sense about me and I want to go out and experience more of this city. Not only do we have wonderful hotspots, restaurants, and live music venues, but we have great people and an outdoor environment that rivals some of the greatest cities in America. My perfect weekend: float the river, listen to Willie, endulge at Hula Hut and soak up all that is "Austin".

Interest Rate News

My, how a week makes a difference! Mortgage interest rates are nearing a low for the year. 30 year fixed rate loans are yet again below 6%. While tomorrow is a big day for economic news with the Jobs report due, investors have been very attracted to mortgage backed bonds over the past 4 days. This has led to a brief dip in mortgage interest rate bringing the 30 year fixed rate conventional mortgage below 6%. The big question remains; Will this continue?

The answer is, it is too early to tell for sure where mortgage bonds will find their comfort range. It appears that bonds are feeling both buying and selling pressure. The pressure to the buy side is that the national economy is showing signs of cooling and there is much anticipation that inflation can be held in check. The pressure to the sell side is that the economy has made a soft landing and there will likely be a run up coming in early 2007 which would once again raise major worries on the inflationary outlook. Usually when this occurs, the Fed is quick to act by raising short-term rates.

I get the feeling that all will rest upon the pending holiday sales season. If the economy is moving along at a moderate clip and retailers show profits compared to last year then we can anticipate that the economy is prospering moderately and inflation can be held in check. This would be great news for mortgage rates. Otherwise, all of the gains in the bond market could be given back with interest. This would ultimately cause rates to move higher and this reaction would be quick.

Bottom line, keep your eyes on inflation and jobs. Check this site for more upcoming information, and if you are on the fence about buying a house, jump now, the window may be closing after December!