 "Photo: Jackie Gilles")
Luxury condos have become a common sight in Austin, but recent statistics suggest that the city's realtors may be having trouble finding buyers.
Sam Carroll, a broker at RE/MAX Downtown Austin, said he has seen the Austin real estate market start to mirror the national economy.
"Austin real estate has really slowed down in the last few months," Carroll said. "This may be especially surprising because it's supposed to be the busiest time of the year."
The amount of units sold this year has decreased 4 percent since 2007 compared to the rate at which the condos are being built, according to a Downtown Austin Condo Sales Summary released by the Downtown Austin Alliance, a partnership of business and property owners that works with the city. The number of housing permits has also decreased from 1,000 in 2006 to less than 80 in 2008.
Carroll said he would not be surprised if many of Austin's condominiums as well as homes in Central Austin have to lower their prices in the near future to meet supply and demand.
Carroll said that in many cases the only way realtors can sell condominiums and homes within a reasonable time period is to lower the price.
"If you have a time line, lowering prices is just about the only thing you can do right now," he said.
Recent statistics show that the relatively stable Austin real estate economy seems like it's beginning to feel the weight of a weak national economy, despite what city officials have been saying.
"I think our market is holding our own compared to other cities across the country," said Austin City Manager Marc Ott. "You can look around and clearly see cranes and construction going up."
The city of Austin's March Financial Forecast Report said to expect "housing market problems" in 2008 as the national economy and development indicators weaken.
Austin Assistant City Mananger Sue Edwards said the nation's overall faltering economy is the main reason for the struggling local real estate economy.
The amount of residential investments in 2008 is down more than 25 percent this year in the U.S. In 2007, residential investments were down 17 percent; they were down less than 5 percent in 2006.
"If you look at the rest of the country compared to Austin, we are going better than the U.S.," Edwards said. "We have seen a small decrease in the real estate market, but it has not been as large as the western and northern states."
Edwards said the city has seen national builders pass on projects in Austin because of bad experiences with similar projects in other states. A national builder opted out of developing the Mueller Residential project in 2007 in North Austin because of similar projects that had failed in other states, Edwards said.
According to a report released by the Austin Board of Realtors, the amount of single-family homes in Austin sold last month decreased 20 percent compared to May 2007. The report also stated the median price for these single-family homes has increased 7 percent from 2007.
"It is absolutely slower, but our economy is strong, and job growth continues to be robust," said Austin economist Charles Heimsath, who helped compile the alliance's report.
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