Recent figures from the Fiserv Case-Shiller Home Price Index indicate that Austin’s real estate market is stabilizing well ahead of the national curve. While Austin home prices have fallen somewhat over the past year, the reduction has not been nearly as serious as the 15% price drop expected for 2009 on a national level.

This correlates with results in the state of Texas as a whole. Texas has weathered the national housing industry crisis remarkably well compared to other areas of the country. The chief economist for Moody’s Economy.com, Mark Zandi, attributes this real estate stability to Texas’s lack of participation in the original housing bubble; because homes were never overvalued, prices never fell precipitously as they did in other regions of the country. Additionally, Texas has a vibrant economy that has been resilient during the national recession. Zandi noted, “Texas has the best large-state economy in the country right now.” This robust economic situation has prevented the widespread unemployment endemic throughout much of the rest of the country, and has protected home prices from sudden losses; College Station and Brownsville homes, for instance, gained in value over the past year.

Austin’s real estate market, in particular, has benefited from the multitude of employment opportunities in the area, especially in the government and education sectors. Additionally, the home building industry has responded to recent financial shifts in a prompt and appropriate manner, preventing large unsold inventories from accumulating and further driving down prices.

The First-Time Home Buyer Tax Credit and it’s expansion on November 5th, 2009 have also been instrumental in shoring up the struggling real estate market. Many economic experts and members of Congress believe that the housing industry crisis will be shortened and its ill effects lessened with the extension of the first time home buyer credit and the expansion to move-up buyers and buyers with higher incomes. The entire economy will benefit from increased employment in the housing sector; additionally, more families would be able to afford their own homes. Experts warned that removing this stimulus too soon will have immediate negative effects on the rebounding housing market and create a chilling effect on the still-fragile economic recovery. While the Texas real estate market remains insulated from the worst effects of the recession, it was essential that the government continued this valuable stimulus in order to ensure that Texas’s housing stability remains in place.