Why are houses selling so slowly in Twin Creeks, Cedar Park, Texas?

Asked by Wendy, Cedar Park, TX Wed Sep 26, 2007

Cedar Park was supposed to be one of the fastest growing counties in Texas and yet I have noticed houses that are up for sale sitting for months with no buyers. What's happening?

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Mark Palace, Agent, Satellite Beach, FL
Wed Sep 26, 2007
Hi Wendy: Supply is great...demand is low...we are experiencing a buyers market. There are signs a housing slowdown that has gripped certain high-growth markets during the past few quarters, is now spreading nationwide.

Preliminary reports from builders Hovnanian Enterprises Inc. and Toll Brothers Inc., whose quarters ended April 30, indicate demand is falling faster and more sharply than previously thought, and that the pullback is no longer confined to hot markets that had seen sharp home price run-ups in the past few years.

Hovnanian's orders fell 20% in its fiscal second quarter -- an about-face from the 5.5% order growth reported in its fiscal first quarter. Toll's orders declined 32%, which is steeper than the 29% dropoff posted in its fiscal first quarter.

For Toll, the order decline was across the board as all of its geographical regions reported year-over-year decreases in demand. Chairman Robert Toll attributed the declining demand to higher cancellations and to speculative buyers who are dropping out of the market and putting the homes they recently acquired up for sale. Although Toll said his company doesn't sell to speculators, "we have certainly been impacted by the overall increase in supply."

On top of this, some builders, such as Centex Corp. and Hovnanian, have started taking writedowns in connection with land options. In general, when builders take writedowns to walk away from land options, it is a sign that either land values are falling or demand in that market has dried up. In past cycles, declining land values often were a sign that a market was falling fast.

Until now, home-building executives said the pullback in demand was largely confined to markets where sales had been overheated and home prices had skyrocketed during the past few years, such as Washington, D.C., parts of California (especially Sacramento), Phoenix and parts of Florida. They blamed speculative buyers for much of the pullback, saying investors had exited the market, causing less overall demand and more inventory.

These hotspots continue to see the sharpest pullbacks, but other markets also are slowing.

Majestic Research analyst John Tomlinson, in his monthly report that tracks new-home sales in 40 major markets, found sales fell year over year in every market during February and March, with the average decline being 25%.

Washington, D.C., Los Angeles/Long Beach, Tucson, Ariz., Sacramento, San Francisco, and Phoenix saw the biggest declines with sales falling 22%, 50%, 50%, 46%, 30%, and 37%, respectively. However, even markets that hadn't been weak previously -- such as Philadelphia, Dallas, and Las Vegas -- softened in the quarter, with sales falling 30%, 15%, and 13%, respectively, he said.

"Almost every single major market that we track is showing pretty significant year-over-year declines in sales," Mr. Tomlinson said. "It's much more broad-based" than it was prior to February.

Rising inventory, slowing sales and bigger incentive packages all signal a correction in the housing industry, Mr. Tomlinson added. But time will tell if this will lead to big dropoffs in home prices, "which I think most people are most afraid of," he said.

So far, builders' efforts to offer more incentives and discounts have "failed to move the needle" in driving sales, Mr. Tomlinson said. As a result, he said some may need to resort to bigger price discounts. "That's the million-dollar question," he said.

Bernard Markstein, director of forecasting at the National Association of Home Builders, said there is no question housing demand is slowing nationwide. He said rising mortgage rates have given people reason to "pause" in their decision to buy.

"We've been getting reports of a slowdown in housing across the board," Mr. Markstein said. But so far, he said, it's just a "moderating of activity -- not a falling off of the cliff." He describes it as a "return to normalcy."

Mr. Markstein is predicting that overall housing starts will fall 7% to 1.95 million from 2.1 million in 2005. He sees demand returning to 2004 levels.

If companies continue to build at the pace they had in 2005, there could be more serious inventory problems.

"We were building at a pace that we did not expect to be sustained and we're seeing a slowdown," Mr. Markstein said. He expects builders to slow their pace of construction to meet the softer demand.

However, many builders aren't cutting back, and are instead talking about opening many new communities in order to drive order growth. Toll Brothers, for example, plans to open 80 communities during the next six months, and expects to wrap up fiscal 2006 with 295 subdivisions, up from 230 in fiscal 2005.
Mark Palace, CEO/Founder
Palace Properties International, Inc.
2 votes
Bryan Maki, Agent, Cedar Park, TX
Mon Dec 21, 2009
The main reasons are due to the economy, financial changes and Twin Creeks specific market conditions.

The whole economy has delayed purchasing decisions across the country and Twin Creeks has seen the same atypical low demand during the summer months but has picked up in the fall. Similar to Central Texas market conditions, over 80% of pruchases in the last 12 months have been under $250,000. Twin Creeks has very similar stats. Most homes sold in Twin Creeks over the last 6 months have been under $300,000. Since teh median value of homes in Twin Creeks are north of $350,000 the odds are not in the sellers favor. For the homes listed over $450,000, Jumbo Loans are a major issue. Higher interest rates, PMI, and lack of funds to put down on a house have made purchase/financing decisions much tougher.

As the other agents mentioned, taxes and monthly fees also add to the decision process and the typical buyer tries to minimize their monthly bill (in this tough economy). The Tax Rate was, at one time, above 3 points but is now at a rate of approximately 2.7. A modest imporvement, but has saved homeowners thousands even when home values have increased.

Also, Twin Creeks HOA is only $30 per month. Twin Creeks Country Club has deeded into all Twin Creeks properties a mandatory 'Community Membership'. It is not optional but a cost ($85 + tax) that must be considered in the biuying process. The perceived benefits to this membership in a golf community are seen differently now-a-days and usually come down to a matter of opinion and the buyers choice of a desired lifestyle. The end result in this economy is that many people opt out of such perks until the 'fun' funds are more accessible.

In the buyers perspective, other houses in nearby communities are more desirable under current market conditions mostly based on the community fees and tax rates. Add on the fact that some sellers are attempting to maximize their value and some buyers bringing low ball offers makes it tough to have a meeting of the minds. In a buyers market the seller always has the short end of the stick.
Web Reference:  http://www.sisurealty.com
1 vote
Kathy, , Cedar Park, TX
Wed Jul 15, 2009
Great answers for you! Those wanting to sell quickly are reducing their prices and those homes are selling!
1 vote
Lisa Tyrrell, , Austin, TX
Mon Jul 14, 2008

Cedar Park is a fast growing city and is doing well. Many homes sell quickly and some do not. It depends greatly on the neighborhood and the specifics of the home within that neighborhood. Each area has an average size and a preferred number of bedrooms/baths and amenities and homes that fall outside the preference for that area will take longer to sell.

Twin Creeks specifically has a monthly HOA fee that is quite high...over $100 per month. That tends to slow their sales quite a bit. Mainly the interest is by buyers that want a private golf course community location. The taxes there are also high, over 3%, because it is not annexed into the city of Cedar Park yet and so they pay extra taxes for emergency services, etc.

For more specifics on the neighborhoods, give me a call. I know the areas and can answer the questions. Cedar Park is growing and will continue to grow...they have some growing pains, but never fear, homes sell and they do appreciate.

1 vote
Lisa Hunt, G…, , Hutto, TX
Tue Nov 27, 2007
Cedar Park is one of the fastest growing counties in Texas; however, with the subprime fallout the ability for people to get home loans isn't quite as easy as it was at the beginning of the year. In addition, there are so many new home builders in the area...it is very hard to compete with them as a resale. Lots of good info here...
1 vote
David Wiebe, Agent, Cedar Park, TX
Sun Sep 16, 2012
Here are some great stats for Austin and the surrounding area.

The Week of Aug. 10-25, 2012 in Review:
Units for Sale: (compared to the same week in 2011)
New listings up 5.42%.
Pending sales up 21.15%
Solds up 4.70%

As for Average Prices: (compared to the same week in 2011)
Sold average sales price increased 12.60% from $250,342 in 2011 to $281,882 today!

Current pending sales are up 28.54% compared to 2011. As of today, we have 3,756 pendings with an average list price of $259,071. Last year we had 2,922 pendings with and average list price of $244,651.

Current active listings are down 16.87% compared to 2011. As of today, we have 8,836. Last year we had 10,629.

The Month of July 2012 in Review:
Preliminary July 2012 Data:
Units for Sale: (compared to July 2011)
New listings up 9.67%.
Pending sales up 18.66%.
Solds up 24.35%

As for Average Prices:
The "New Listings" average list price is up 2.65% to $304,219. In July 2011 the average list price was $296,359.
Sold average sales prices increased 7.58% to $276,822. For July 2011 it was $257,322.

Available Inventory of Homes
We had 10,629 active listings during the same week in 2011. Today we have only 8,836 -- a 16.87% decrease from a year ago (when inventories were down from the year before).
0 votes
Ignatiusman, Home Buyer, Cedar Park, TX
Sun Aug 12, 2012
I bought a home in Twin Creek in Early 2012. I bought my home here for a few reasons.

1. Nice, Quite, Peaceful Area - In some other neighborhoods the house look run down, untaken care of; You can hear cars outside your house at night. Not in Twin Creek, Sprinklers and lawn care have gone a long way in Twin Creek to keep it looking great.

2. Price, Quality - I got an average deal on my home, but i like the construction (2007), and layout; being newer is also nice. Yes, the HOA and member due are $125 a month and probably going up forever.

3. Amenities. - Community pool has a huge water slide and is awesome. Gym - is ok. Park/Playground in the center is nice. Golf - lessons will get you on the green. Full member price varies; i don't play golf, but i want to.

4. Schools - are the best your going to find if you can't afford West Lake or Circle C home (which might be nicer but $$$).

5. Lots of other houses sucked. We saw a lot over 8 months of searching.
0 votes
Mking, Home Owner, Cedar Park, TX
Sun Jan 8, 2012
One problem I see is that homeowner's are required to a pay monthly Country Club fee, even if you do not wish to belong. The cheapset membership is $100.00 per month. This includes pool access and work facility. There is no hot tub, suauna, or steam room, something that you would expect to get with a gym membership. Gym memberships go for around $25.00 a month versus the $100.00 a month you are required to pay at Twin Creeks. This is on top of the HOA fees which are $100.00 per quarter. You pay a premium to live in Twin Creeks. In realty it adds $100.00 to your mortgage payment. Some people I'm sure find better deals else where. I for one will be leaving soon to a community that does not charge for the privilege to live there.
0 votes
John Staplet…, Agent, Cedar Park, TX
Wed Feb 9, 2011
Premium neighborhood, premium pricing, but the finish-out doesn't live up to buyers expectations.

It appears many homeowners had to cut corners to get in to Twin Creeks. I've found cultured marble in some of the master baths, small back yards with the neighbors crowding the back fence, kitchens that are at best larger versions of average ones... At these prices, in a country club community, buyers need to be wowed a little by the details.

Lots of very nice homes - just too few exceptional ones to warrant exceptional pricing..
0 votes
Roy DuBose, , Austin, TX
Wed Oct 6, 2010
a couple of things --

1) cedar park is, in my opinion, a first time home buyer's area -- most homes priced under $175k -- due to the availability of 100% loan money via USDA and a fairly high default rate, Leander has become a mecca for those entering home ownership
2) the price points for the community don't lend themselves to move up buyers -- if you get a competitive price on a home and invest to upgrade it, you'll probably not get your money back even in the long run

Anderson Mill, just inside 620/183, represents a better buy (imho) because it is outside the toll zone and has GREAT schools -- most homes there, even the upgraded ones, can be bought for $100/sqft --

if you want, i'l send you a local "hot sheet" on the most current market trends in each of these specific areas

0 votes
Nell Hanson, Agent, Cedar Park, TX
Wed Oct 6, 2010
Hello! Your answer is the amount of inventory. I suggest if you list with me that we look at the competition. You need to personally view the other homes on the market. Then price yours to compete. Cedar Park is growing but you probably have 9 months of inventory. That is a huge number. We need to get to 3-4 months of inventory and then homes will move in a normal time period 90 days. Call me if you need help!
0 votes
Victoria Pan…, Agent, Miami, FL
Fri Aug 20, 2010
Nationwide research shows that there are five main reasons real estate doesn't sell:
1 -Price
2 -Condition
3 -Location
4 -Listing Agent
5 -Marketing Plan

This is not a secret that our economy is not in a great shape, so the people are more cautious to get a loan, also the banks change their guide lines and conditions all the time, But Cedar Park is selling well, check your price and contition of the house and You will have a SOLD sign soon. Good Luck
Web Reference:  http://www.victoriapando.com
0 votes
Don Groff, Agent, Austin, TX
Tue Jun 15, 2010
When homes are just sitting on the market it is because they are not priced correctly. Buyers today are looking for a deal and homes that are overpriced are not even being considered. Sellers need to make sure their agent is giving them accurate market data so homes can be priced competitively in the market. It's not the agent that determines the price a home will sell for... it's the market.

Sometimes sellers need to ask a certain price to avoid having to bring money to closing but if the market will not support that pricing the homes will just sit. Often times now I am taking my clients to actually look at the home in their area and see what amenities they offer and what they are listed for. This will typically help serious sellers price their homes correctly. Home are either priced to sit or priced to sell. Make sure you are looking at the market data your agent provides and do not always go with the agent that is giving you the highest sales price because often times they are just trying to get the initial listing and hoping you will keep reducing the price until it sells... also while the home is on the market the agent is receiving buyer leads that he can show other homes.

Often times people thing that an agent wants to price the home low for a quick sale to make commission. The truth is homes that are on the market for a couple months or longer will generate multiple leads for the listing agents before the listing expires or the sellers reduce their home enough for it to attract offers.
0 votes
Lisa Hunt, G…, , Hutto, TX
Wed Nov 28, 2007
Hope this is helpful...

Cedar Park Residential Build out within the Decade
Cedar Park is approaching a time when it will be virtually built out. It is landlocked — bordered on all sides by the city limits or extra-territorial jurisdictions of other cities.
“We’ve had projections of build out as early as 2012 and as late as 2015 or ’16 based on growth patterns,” said Duane Smith, director of planning and development. “There are other variables in there such as the economy and what forces interact on you that you have no control over.”
Smith said a population estimate of 95,000 is a reasonable maximum. –Impact
0 votes
Bruce Lynn, Agent, Coppell, TX
Wed Sep 26, 2007
I think there is also some backlash of people wanting more time. Lots of people who bought in those areas traditionally moved there to get bigger house, bigger yard, newer house, etc. Now there seems to be more people who want to live closer to work and will comprise their wants to increase their time.
Web Reference:  http://www.teamlynn.com
0 votes
Perry Hender…, Agent, Austin, TX
Wed Sep 26, 2007
There are a lot of great deals out thre, rents are up but those darn loan programs are down. You have to be able to get a loan on property to buy it. Most people I know are having a hard time committing to another house when the market is so unsure.
Web Reference:  http://perryhenderson.com/
0 votes
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