Tuesday, March 17, 2020 / by Jenny Carroll
Austin Housing Market: Coronavirus and the Stock Market
There is much to digest and consider in times of such fluctuation and uncertainty.
Let’s start with the underlying strength and vitality of the Austin area economy. We are a diversified economy with technology, the university system, medical community, music and film scene, state government, and travel all creating a solid base. We are generating jobs and have low, low unemployment. We have that lifestyle “something” that lures people here, plus no state income tax.
These things work together to create a vibrant real estate environment and a market that is buffered against some of the things that damage less robust cities. Let’s say the Austin area has a healthy immune system!
Additionally, housing markets are not typically tied to stock market swings because housing is a basic need. Babies keep being born, people still upsize or downsize; life goes on. Mortgage interest rates are historically low, with room to drop further as the Federal Reserve lowers interest rates in response to stock market concerns about the coronavirus disrupting supply chains and lowering corporate profits. Also, demand appears to be strong earlier in the year than usual, evidenced by high web traffic and strong sales so far in 2020.
On the supply side, our area inventory of resale homes is low and home builders are bringing new properties online as fast as they can. The supply of materials will likely slow because roughly 1/3 of those materials are currently sourced from China. Builder optimism is still high and most area builders are still planning expansions. All said, there is upward pressure on prices in this supply/demand scenario.
Real estate is still a solid investment in our stable economy, and housing is still a basic need; an investment you can also live in.
If you currently own property in our market, congratulations on a smart investment, and check your current interest rate to see if refinancing is in order. If you are 1.5% above the current market, call us to discuss the pros and cons, and if it seems that it will improve your situation, we can introduce you to a trustworthy local lender.
If you are a prospective buyer or seller, let’s talk about your options and how to position yourself for the greatest success. Our MLS shows 1000 listings pending, 500 of which were on the market two weeks or less. There is no substitute for a knowledgeable local professional to help you maximize your experience in an active market like ours, and a process as complicated as a real estate transaction!
In spite of all the uncertainty on the world stage right now, the Austin area is a great place to call home.
Cheers and good fortune to all!