The Carvajal Group Blog

Foreclosure Frenzy

February 21st, 2011

Austin has a relatively healthy housing market and was initially spared from the waves of foreclosures that have plagued most of the nation.   In 2009 when the national news was filled with stories of plummeting real estate values and  an epidemic of foreclosures…we saw very few, particularly in central and affluent areas of Austin.

However, as the national economy remained somewhat stagnant and unemployment  is still hovering around 9-10%, Austin has seen a sharp increase in foreclosures over the last 12 months.  According to the Austin Business Journal, we saw a 22.6 % increase in foreclosure filings in 2010 from 2009(link).  We have started to see foreclosures in central neighborhoods such as Barton Hills and affluent communities such as Westlake and Lakeway.

These properties can offer incredible investment opportunities and it is no secret.  I recently had a client make an offer to purchase one of these properties(A Fannie owned duplex in Barton Hills).  They had at least 10 other offers within 1 week on the market and that was supposedly just owner occupants!  My clients offered about 5% over list to give themselves a fighting chance at being the  best offer, but there was apparently a better offer.  This particular property was a steal even at 10% over list.

I think multiple offer situations like this are actually an indication of the strength of the Austin market  and a testament to where property values are headed.  While the Austin market did lag behind the majority of the country in regards to number of foreclosures, our local economy and housing market over all has remained among the strongest in America.  There will continue to be foreclosures and other distressed sales in the immediate future, but I honestly believe we have weathered the worst of the storm and that is why so many savvy buyers are attempting to take advantage of the foreclosure opportunities before they are gone.

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