There are many factors that contribute to a drop in home prices including a weak economy, a rise in unemployment, steep mortgage rates and so on.  Recently the subprime mortgage crisis has led analyist to anticipate a drop in housing prices.  But what about the stock market?  Does a drop weaken housing costs?  According to Dean Baker, codirector of the Center for Economics and Policy Research, "Not really.  In general, when the economy goes into a downturn, it's usually a bad time for housing and a bad time for the stock market.  But it's not as if the stock market is causing the fall in home prices."  In recent years the stock market and real estate markets have moved in opposite directions, states Lawrence Yun, senior economist at the National Association of Realtors.  Mr. Yun went on to say, "In the early part of this decade, housing prices continued to rise even as stocks fell. More recently, the stock market has been performing well, while housing prices have been flat to down in much of the country.

So how does this affect the Austin market? Well like politics, all real estate is local.  Local employment rates and the local economy are the keys.  Austin currently has a vibrant economy and low unemployment.  Curious about the market in your Austin neighborhood?  Call us.  We are always happy to talk real estate.