Highland Lakes Real Estate Market Update

The lakefront bargain shoppers were out in force during 2011.  Fifty five more lakefront homes sold this past year than in 2010, an increase of 40%.  However, all other price indicators (sales price, price per square foot – median and averages) were down.  The year ended with a 15 month supply of waterfront homes on the market. 

All price indicators for off water properties were fairly flat year over year, up or down 2% or less.   The total housing supply has improved with an inventory of 16.2 months (total market) as opposed to the 21.7 month supply we saw last year.  

Highland Lakes Area MLS Market Outlook 2011

As you hear in the press, many economists feel that the economy is improving.  It appears that the Highland Lakes area real estate market is trending in a positive direction.   For the first time since 2007 we have seen an increase in the total dollar volume of single family site built homes sold (chart 1), and a leveling off of the non-lakefront number of units sold.  Providing the economy remains stable, I am anticipating that we have reached the bottom of the market.It is important to keep in mind that the Highland Lakes Area is a small and unique market, and a few large lakefront sales can skew the numbers substantially.   I track the total market, non-lakefront, and lakefront markets; however, I feel that the non-waterfront market more clearly represents the trends in our area.    

Chart 1

We have been fortunate to enjoy a fairly stable local economy in the Highland Lakes area, and even though the end of 2010 showed a housing supply of 20.70 months, sellers had enough confidence in our market and the financial ability to avoid substantially discounting their homes.   Since 2005, the Highland Lakes Area has seen the total unit sales for single family site built homes decline by 48.31%, lakefront unit sales declined by 62.8%, and non-lakefront declined by 41.76%.  During this same period the dollar volume of sales was only down by 25.16%.  So, while unit sales are down, prices have held relatively firm. The sellers confidence has helped to keep the average price per square foot on non-lakefront property at $97.05, a relatively low average depreciation rate of 2.68% per annum since 2007. 

Long term, the following factors should provide for a stable and growing market in the Highland Lakes Area:

    Lake of the Hills Regional Medical Center Construction of the clinic to commence in July 2011, anticipated completion by August 2012.  Hospital construction to begin after that.

    Baby Boomers.2011 marks the year the first boomers start to turn 65.

    13% projected area population growth over the next 10 years.

To review this report in full with charts and additional data go to http://www.myhillcountryhome.com  and select 2011 Outlook on the side menu.

All figures are deemed to be reliable but not guaranteed.

Real Estate Market Report

FHA Monthly Insurance Premiums Increasing 10/4/2010

After that, the monthly insurance premiums on FHA loans will increase by over 63 percent.

A homebuyer purchasing a $200,000 home using a $193,000 FHA mortgage before Oct. 4 would pay an insurance premium of $88.46 per month. If the same homebuyer waits until after, the insurance premium increase, the insurance premium would jump to $148.01.

US Market

Even though the first half of 2010 showed an improvement in the housing market, economist is not expecting the same for the last half of the year.  With the expiration of the home buyer tax credit and the winding down of the unprecedented government stimulus, the trend may not be sustainable.

Highland Lakes Area Market 

In the Highland Lakes Area for the first half of 2010 we experienced a 5-6% increase of sales over last year, while nationally sales were up 12.4%.  There is currently a 17.92 month supply of homes on the market (Total listings/absorption rate, calculated over the most recent three months), in the Highland Lakes MLS.   The Highland Lakes Area inventory figure is substantially higher than the national inventory (Ranging from 8.6 to 11.9% over the last few months); I feel this is due to the nature of our market.  Not being a large metropolitan area, generally people are not relocating here for employment opportunities.  In addition a large part of our market is second homes, and there are a larger number of these type homes on the market as indicated by the 36.86 month supply of homes in Horseshoe Bay.    

Generally, homes in our area are selling for roughly 90% of list price.

Highland Lakes Historic Data

All information is deemed reliable, but not guaranteed.