The Austin real estate market continues on an even keel, with pockets of high inventory, particularly in upper end homes. Below is a review of our second quarter market analysis - focusing on the number of months of inventory for sale in each MLS section. Our goal in this study was to spot changes in inventory that predict where the market is going. This data is for single family houses, without condos.
2nd Quarter 2009 results are posted here: Austin Market: 2009-2nd Quarter
1st Quarter 2009 results are posted here: Austin Market: 2009-1st Quarter
Austin as a Whole:
For the Austin area as a whole, the inventory of houses on the market was 6.3 months at end of 2nd Quarter, 2009. By comparison, the inventory was 5.9 months at end of the 1st quarter. So, inventory has grown slightly, but our position is still at a medium level. Overall, Austin continues to have a balanced real estate market.
Austin in Parts:
We reviewed 45 different geographic sections in the Austin area:
Seller’s Markets: 7 sections had less than 4 months of inventory
Balanced Markets: 18 sections had 4 – 6 months of inventory
Buyer’s Markets: 20 sections had over 7 months of inventory
The buyer’s market sections were not so overloaded that they brought the whole Austin market into “buyer’s market” range. The overall average for the Austin area was in the balanced range – at 6.3 months of supply.
Price Range:
It is clear from this study that higher priced homes tend to be over supplied in most market areas. Areas with many homes over $800,000 include Central and Northwest Austin, Westlake, Barton Creek, and Lake Travis. These neighborhoods tend to be selected by builders who add to the supply. We expect to see this inventory dropping, since new starts are down. However, by the end of second quarter the number of homes for sale over $800,000 increased. Months of supply for homes over $800,000 are:
1st Quarter 2nd Quarter
Months Supply Months Supply
Area 1B 25.1 28.7
Area 8E 21 21.6
Area 8W 22.1 23.7
Area W 24 25.8
Area LN 34 40.4
Area LS 28.8 38.8
Foreclosures:
On average, foreclosures are 3.6% of listings on the market – not a significant part of our market. At the end of the first quarter they were 3.7%, so not much change. However, some sections of Austin have more foreclosures than this. These include the Manor, Elgin, Bastrop and some Southeast areas. Here you may see foreclosures at 8% to 12% of listings. These areas were popular with first time homebuyers, and were also targeted by investors during the boom market. The good news is that these neighborhoods do not have high inventory levels. This indicates that their foreclosures are being absorbed quickly and inventory is not building up.
Conclusion:
In Austin we are not faced with serious depreciation, as a result of prices that were pushed to unsustainable levels.
We are not faced with a serious foreclosure problem, generating its own downward spiral.
And, we are not faced with widespread job loss. We are a city that people are moving to. Forbes ranked Austin #2 in Top Ten Cities for Relocating, citing “the metro area’s thriving music, film and fine arts scenes, but it’s also about the employers, which include University of Texas, Advanced Micro Devices and Dell.”
The current market still has higher than normal inventory in many popular neighborhoods – where builders were counting on faster absorption. This is true of all price ranges, and is especially noticeable in the higher end.
For buyers it is a great time to come into the market. Interest rates are the best in a lifetime, and they certainly will not remain this low. This is not the time to be waiting around for a better deal. It is the time to start shopping for a great place to live in Austin!
Do you feel that the recent mandatory audit has in any way effected the real estate market or has it been a seamless transition? I run a company that does the audits. It’s called Austin Auditors. Website is http://www.austinauditors.com.
I feel that rather than be something to which consumers are averse, the energy audits are a symbol of Austin being progressive and interested in a sustainable community. It is important that buyers are in tune with the fact that rebates are available following their purchase of the home. You can visit my website at http://www.austinauditors.com/gov_rebates.html to see the rebates available.
Comment by William — July 14, 2009 @ 8:18 pm |