Hit hard by the 'tech wreck' that began in 2000, Austin, Texas has had over 17,000 layoffs from technology companies alone. This has flooded the market with homes, lowering prices and increasing choice for buyers. But local Realtors maintain that the same attractions and conditions that brought tech companies to Austin will help turn the housing slump around.

"Austin is a captivating city full of diversity, beauty, entertainment and a wealth of job opportunities," say Realtors Rob and Carolyn Abbott.

Yet the real estate market is experiencing a downside.

"In our experience, buyers have adopted an 'investor' attitude when buying in Austin and surrounding areas," say the Abbotts. "With plenty of inventory to choose from and prices very attractive, along with all-time low interest rates, our buyers are finding very attractive homes for sale at affordable prices. However, the price slide we've witnessed in the sub-300K range may be stabilizing or even slightly reversing, with some new home builders raising prices slightly over the next few months."

They add, "Despite the price trends of late, remember that closed volume is up this year over the previous year, though for the month of August closed volume dipped lower than for the years 2000 and 1999, indicating an end to this years closed-volume leadership. Overall the housing industry is keeping its head above the political, economic, and stock market worries. Buyers find themselves in the lucky position of having many good homes to choose from, the lowest rates in years and sellers who are motivated to work with buyers more so than they were over the last three years.

"In the new home economy, builders continue to offer aggressive incentives such as paying points, free upgrades, Realtor bonuses, etc., which can make it difficult for the resale market to compete," they continue.

The Abbotts advise, "This market necessitates the homeseller to choose a Realtor familiar with new technologies, allowing for comprehensive Internet exposure, successful sales experience and, most of all, the ability to market your home aggressively to prospective buyers. Other opportunities in this market include an opportunity to pursue a move-up plan - as the market continues to soften in the upper price ranges and interest rates remain very attractive. Those of you considering selling should carefully consider pricing your home to market value, and not pricing yourself out of the market at a time of inventory surplus. Those of you considering purchasing in the near future are presented with incredible choice, negotiation leverage, and low rates. Austin is a wonderful place to live, and the time has never been better to begin ownership or take advantage of your move-up opportunities."

Explains Realtor Ron Helle, "The Austin, Texas market has undergone some significant changes in the past year and a half. More than the other major Texas cities, Austin experienced over 17,000 layoffs in the high tech market alone. This has also had an impact on the service sector as well. The Austin market is a complex one with many high-dollar communities built around golf courses or the lakes in and near the city. The economic downturn has resulted in an increase in homes over $300,000, allowing a buyer to have a wide range of choices when looking for a home. Builders continue to build and the overall sales figures have not dropped drastically. Foreclosures have gone up, but nothing compared to the 1980's. As a result of the pent-up, first-time homebuyer market, coupled with a number of financing options created to get qualified buyers without cash into homes, the under $300,000 market has remained fairly stable.

Helle advises, "While now is a good time to buy, buyers need to beware of the impression that sellers are desperate and are going to sell significantly below the list price, as that could be unrealistic. From a seller's standpoint, activity is generally slower than in the years leading up to 2001. More than ever, the seller needs representation by an agent that is technologically proficient, and has the seller on a Web site that is accessed by all of the major search engines. Simply being on the Internet is not sufficient to ensure a sale. In our office to date, every sale that we have had, with only one exception, was with a buyer generated by our Internet Web site. The trend is a much greater reliance on technology to narrow the focus of what a buyer is going to look at.

"Regardless of the economy, the natural beauty of the Texas Hill country, with it's lakes, streams, and wide variety of amenities, remains a desirable location. The high-tech community will rebound and things will be off and running once again."

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Published: October 10, 2002

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