Austin's Persistent Real Estate Cycle - Part 1

8/13/20069:16:49 PM Link |  | Add comment

Buyers, Home Buying, Home Selling, Local Real Estate Information, Market Statistics, Real Estate, Sellers

This is the first in a 3 part blog on the real estate cycle in Austin, Texas.  Many people behave as if a certain economic situation will continue into perpetuity.  Many times this is played out all so evidently when a bubble bursts on a particular market, whether it be the stocks in the early 2000s or the real estate bubble that is occurring on the coasts, especially notable in Miami and California.  Operating from the standpoint that because something appreciated 'x' amount last year, it will do so this year, is not only foolhardy, it's just bad business.  It seems so common sense to even say it, but yet time and again I see people repeat the mistakes over and over, giving into greed and trying to make a quick buck, so it bears repeating - and understanding. 

It is with that goal that I undertake these writings, so that the information is out there for all who want it.  For a while there I thought this was really something I could show to my clients - a unique understanding of the Austin market, where it's been, where it is now and where it is heading - and something to hold on to.  In other words, something I could provide to my clients as an incentive for working with me that I feel few other agents understand.

However I've decided that particular line of thought is not the right place to be and is not where I feel good.  I don't want anybody making a decision without this information if at all possible, even if they aren't working with me.  I think it's important information to have for anyone who wants it and so, by writing it here, I hope it finds its way into the hands of the people who are searching for this knowledge and it allows them to make good financial decisions.

I cannot speak in depth on the cycles of the stock market, or even the real estate cycles of California, but I can offer some fairly detailed, yet pretty concise, information regarding the persistent real estate cycle of Austin, Texas.  It's been my home for over 30 years and it's a place that I love and love to understand.  I hope the information I share with you in this series brings you the knowledge you seek.

....................................................................................

In 1994 I was fresh out of college with my BBA in Real Estate/Finance and working for the broker, Doug Gurkin, at Keller Williams Commercial - Shopoff & Gurkin.  I mostly handled much of his real estate sales/listings for many of the small multifamily properties (duplex-fourplex) that his past clients, almost all of which were investors, were 1031ing out of their inventory while he worked diligently on another company he was involved with - Asset Recovery Fund.  On the side from that I did some work for the local CCIM chapter and, in particular, helped in putting together the book that was handed out to all who attended the CCIM's broker forecast. 

It was while working on the CCIM's broker forecast that I ran across an article from Dr. Stephen Pyhrr entitled Austin's Persistent Real Estate cycle.  If there was a more formative moment in my real estate career I'm not aware of it.  I believe I have referenced the article, and the findings of his research, to almost every client I have worked with since that time.

The article was written in the early 90s and it discussed the cycles within the Austin real estate market through the ups and downs of a couple of cycles.  Dr. Pyhrr then graphed out the cycle through the date of the article.  What he found was that Austin has a historical "up" period of 8-10 years and a historical "down" period of 3-5 years.  He then projected how the Austin market would behave through 1999 (at which time he put ???s). 

How did it all turn out?  I'll cover that, as well as more detail on the cycle, in Part 2.

If you would like a PDF of the article, feel free to email me at Brink@WestElmProperties.com and I would be happy to forward it on to you.