According to the Austin Board of Realtors, home sales in the Central Texas area increased by 27% when comparing March 2010 to March 2009 despite the fact that the median price of homes remained stable at $180,000. When comparing figures from January through March, the sales in Central Texas were up by 12%. Although the increase in sales is certainly good news, many are still concerned that the end of the federal homebuyer tax credit may put an end to this positive trend.
“Though we’ve seen increases in year-over-year sales volume consistently in recent months, it’s likely this substantial increase in volume is related to the impending expiration of the homebuyer tax credits on April 30,” said John Horton, who is the chairman of the Austin Board of Realtors, in a Statesman article. “What’s most encouraging, however, is that in the midst of this increase in sales volume, our real estate values have remained steady, which bodes well for the long-term value of real estate in Austin.”
Currently, the tax credit provides up to $8,000 in credit to first-time homebuyers and up to $6,500 to repeat homebuyers. According to most experts, the credit was the primary force behind tens of thousands of sales that have taken place throughout the country over the last several months. Therefore, some are concerned that home sales will slow down significantly when the program ends. Currently, in order to qualify for the credit, the sale needs to be under contract by April 30 and the closing needs to take place by June 30. As such, there are literally only days left for buyers to take advantage of the deal.
When it comes to looking at the Austin area specifically, the Austin Board of Realtors reports that 70% of the homes sold were priced at $249,000 or less during the first three months of 2010.
Sales of townhouses and condos were also strong in the Central Texas area in March of this year, with sales jumping 129% when compare to March of 2009. This increase continues the trend that started in September 2009, at which time there was an 86% increase in year-to-date sales.
“A softer condo market at the beginning of 2010 provided a good opportunity for buyers, and we are now seeing the results with an increase in activity,” continued Horton. “Condos can be attractive properties for first-time homebuyers, so it’s possible this increased demand is also related to both the first-time homebuyer tax credit as well as an increased supply of condos in Austin in recent years.”