Austin Real Estate Blog

So it seems austin has had a spike in prices in the last few months. In particular central areas have seen a pretty decent spike. People would think this would benefit real estate agents but it actually is a little annoying. People expectations of what they can find with say a 200,000 limit doesnt tend to change as fast as the market. So its a little of a pain to deal with. In a sense I would have preferred prices to remain constant. For the hard numbers for September 2005 the average price was 214,043 and the media price was 162,000 comparing that to the last few years.

September

	Average	Median
2005	214,043	162,000
2004	205,362	159,900
2003	200,810	157,360
2002	201,105	155,000

I would say the increase in downtown areas has been more pronouced than these numbers show since they factor in areas like Round Rock which have been pretty flat recently.

Mortgage rates seem to be rising as well. According to bankrate they are at an 18th month high here is the article from bankrate. Usually increasing interest rates puts a downward pressure on prices but that doesnt seem to be happening at least here in austin.

But overall these two changes are pretty tame. Prices have increased but they havnt spiked like they have been in Florida and California. Interest rates have gone up but again they havnt spike up.

I would say the big news has been the results from Bush's tax reform commission. Most importantly their recommendation that mortgage interest deductions be reduced. This has pretty much freaked alot of people out. While it would have the largest affect on places like California because of higher prices it would have a pretty strong affect on austin property owners and the austin real estate market. Im not too concerned for two reasons. First most of my property is investment property. Therefore my mortgage interest is an expense and not a deduction so this change wont affect me. Second I dont think its going to pass.

Its chances of passing are pretty low because there will be a large, organized, and well financed opposition to it. The national association of realtors would probably dump large buckets of money on the capital of this came close to passing. Since it affects almost all home owners the mortgage interest deduction is pretty popular in the general populance. So it would be a bad move for anyone in Congress that is slighly worried about reelection to vote to reduce it. And lastly Bush's political capital has been greatly reduced. Maybe at the peak of his popularity he could have a fighting chance of getting this passed. But in his current position I dont see him being able to push anything this unpopular.