Real Estate News From Austin, Texas

"A number of new statistics and reports out now will be of interest to real estate entrepreneurs and home buyers in the Austin, Texas area. The Austin Board of Realtors is reporting that for the first June in five years, sales of existing homes in Central Texas have dropped. In fact, in June 2007, sales dipped 6% from the same time one year previously. Some suggest that the reason may be stricter credit regulations imposed by lenders after the collapse of the sub-prime mortgage market. The drop in sales occurred mostly in properties priced at $130,000 or less, which suggests to experts that the dip in sales comes from buyers who no longer qualify for loans from lenders who a few years ago would have gladly handed out mortgages.

In June 2007, over 9,000 homes were on the market. This represents an 8% rise over the same time last year. This number of homes on the market is the largest in a number of years. It looks as though the market is moving to a buyer’s market, although median prices continue to increase, at least so far. In June 2007, the median price for homes in the area was $191,050 in June, which is a 7% rise over the same time last year.

In other market news, Grubb & Ellis' second quarter Industrial Market Trends survey is out and is showing that the net absorption in Austin’s industrial rental market during the second quarter of 2007 was over 2.6 million square feet. Entrepreneurs and investors take note. Vacancy rates in the industrial sector were the lowest in seven years after dropping 90 basis points. The 68.4 million-square-foot sector is now at 7.3% and over 1.4 million square feet are still being constructed currently.

According to Grubb & Ellis' second quarter Industrial Market Trends survey, Austin has a low vacancy rate of only 3.7%, which is in the standard industrial product. The standard industrial product led all sectors in growth, with 1.8 million square feet. At the same time, rents increased $1.38 PSF compared to the same time last year. Asking rents rose from $0.66 to $7.75 triple-net per-square-foot-per-year (NNN PSF/YR). The survey reports that part of the growth comes from Samsung Electronics Co. Ltd., which opened a 30 mm NAND flash memory wafer plant in the northeast. The 1.6 million-square-foot facility is one of the biggest such facilities in the country.

The Grubb & Ellis' second quarter Office Market Trends report further described the office leasing market in the city. According to the report, the market grew for the sixth consecutive quarter in the second part of 2007. The over 39.2 million square feet office leasing market now has an absorption level of 600,811 square feet. However, the vacancy rate overall in the city grew 20 basis points higher to 11.5 % by the end of the quarter. The highest vacancy rate was among Class-B office spaces, which had a 12.7% rate. Class-A office space had an 11.4 % vacancy rate. Class-C office spaces had a 6.8 % rate of vacancy. According to the report, rents rose from $1.25 to $25.88 per-square-foot-per-year as landlords increased rents over the previous records set in 2000.