REAL ESTATE REFLECTIONS JANUARY 2019
Happy New Year to all! We hope you had a lovely winter holiday filled with love, peace, and happiness. While I don’t own a crystal ball, I do like to reflect each December about where I think the real estate market is going in the year to come. So here are my predictions for 2019.
Austin’s market overall
While Austin is doing better than the rest of the country, we believe our rate of appreciation will be a little slower than what we saw in 2018. Instead of 5.5% appreciation, we expect to see +/-4%. That’s still good, but when you’ve been as hot as the Austin market has been, it will feel like a slow down -- similar to shifting from 70 MPH on the highway to a 55 MPH zone.
Of course, appreciation isn't an even playing field. Some areas of the city will do better than others. As I read the tea leaves, homes over $1 million won’t do as well as homes under $400,000. Small and attractive homes should continue to do well.
Our favorite 2019 neighborhood for under $500,000
As far as neighborhoods go, we expect to see growth in homes under $500,000 here:
|North Allandale||Everything west of 183 between Mopac & 620|
Several of those are just outside the Central Austin loop, but I think the desire to be close in and keep costs down are going drive interest in these areas.
Our favorite 2019 neighborhoods for over $500,000
For homes valued at over $500,000, we expect to see more appreciation in these neighborhoods than in other parts of the city:
|Courtyard||Westlake (inside 360)|
Allandale, Crestview and Westover Hills are still close to the heart of the City, but they are much less expensive than their neighbors to the South. I added Northwest Hills and Westlake to this list because of their strong schools and proximity to downtown. Jester and the Courtyard may feel like they are out of the city (and to some that is a strong draw), but when you look at a map you're really still in the mix of things – so long as you are willing to drive a car.
Unique homes or those in excellent condition will likely still draw a bidding war no matter where they are.
But are we in a bubble?
I don’t think so. We expect slower markets in the coming years, as we should. You can only run hot, hot, hot for so long.
What is happening is that our interest rates are having a depressive affect as intended. Uncertainty in Congress also leads to uncertainty elsewhere. We can expect things to slow to a more normal pace in 2019.
What that means for you
If you are a seller:
My advice from the Fall still holds. Keep your property if you can; the longer you hold it the more you will make. If, however, you foresee needing to make a change in the next few years, I would do it now rather than wait another year or so. And if you can pick your timing, sell earlier in the spring season rather than later in the summer.
If you are a buyer:
You should have a minimum time horizon of three years. While I don't see prices going down, I am cautious. The waters are choppy, and I want to make sure you win.
So cheers to the New Year! I hope it brings you much joy, peace, and happiness. And if you have questions, please don’t hesitate to reach out.