jumbo rates

When thinking about the strength of the Austin real estate market during normal times, there are three important variables that drive home values: population growth, job growth, and interest rates (you need to look separately at conforming and jumbo rates).

While job growth does not seem to be occurring -- layoffs are being announced every week in Austin much like the rest of the country -- the other two variables are surprisingly strong.

The national real estate markets are a mess. The economy is in recession, credit is very tight, jumbo rates remain high.

While the Austin market has stayed alive -- and actually thrived compared to the rest of the country -- it is a very tough time to be selling real estate.

The mortgage crisis is now front page news all across the United States. While conforming loans remain okay -- primary loans with values below $417K and full income documentation for buyers with solid credit - the investor market for everything else is in trouble.

The result is a rapid rise in rates. As for the condo market, there will be very little effect for buyers of units that are less than $500K.

For the high-end market, however, the market change is dramatic.