The S&P’s Case-Schiller Index tracks home prices in the top 20 U.S. housing markets. The Index dropped a record amount in January, and according to the NY Times, the chief economist for MFR predicts that housing prices nationwide will not bottom until some time in 2010. I tend to agree with him, though I think Austin will bottom this year – it may have happened already this past January.
Austin was not included in the Index, but Dallas is a good barometer for Texas as a whole relative to housing prices in the U.S. You can see below why Texas has not been impacted by the downturn in the same way as other regions:
Clearly, Texas never had the run up that the coastal regions had, and it has not had the rampant unemployment that has plagued Michigan and the Midwest.
We have seen a tremendous uptick in purchase activity since mid February. Low mortgage rates coupled with the homebuyer tax credit has been especially effective in spurring “first time” and “move up” buying activity. While we anticipate rates to remain low for a while, it will be interesting to see what impact inflation may have on the market in the next 24 – 36 months.
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