Austin, Texas: Come Discover the Wealth
by Carla L. Davis

Austin realtors and local experts weigh in on the local housing market and economy: “Our current characterization of the market is positive, with upward movement. September & October saw some changing conditions from last month, that being an increase in new sales along with pending home sales, but a decrease in new listings! The tightening of supply is tipping us into a characteristic sellers market condition for new and used homes; yet the increasing population dictates appreciation for buyers. There has been a decrease in the number of “New” listings when compared to the same month in 2004. New listings are down by -11.37 percent. Pendings increased by 27.09 percent and Solds increased by 11.38 percent. As for average prices, “New Listings” average list price is up by 10.57 percent. Sold average sales prices, increased by 3.03 percent to $207,445 over last years average of $201,344.” (The average list price varies among realtors.)

“Not only this, but the average months of Inventory for all homes under 200,000 is shrinking, now at only 4.10 months. For homes priced up to 150,000 the inventory is almost exactly at 3 months supply! I would consider 4 months of inventory to be indicative of a sellers market. However, how much of this is attributed to increased investor/renting activity is questionable, and the extent of which would matter as to whether we could call this a sellers market or not. We’re at the moment leaning more toward a neutral stance as the amount of investor activity in Austin is strong with it’s excellent (undervalued) home prices (Austin homes were recently ranked about 5 percent undervalued according to USA Today; 8/17/2005).”

“New home building continues at a healthy pace, with new home builders offering enticing incentives to our clients–both investors and home buyers! Remember, we believe a big part of the driving force of these home sales are the investors — from New York to California — who have made up more than 80 percent of our business since late 2004.”

“Prices are up in the Austin metro area. Look at the following numbers and I think you will agree that our market is making a turn upward,” says one realtor. “In a normal or flat market, beginning in September through December, we will see decreases where we had seen increases. We are experiencing this slight downward move at this time in our area. We can probably expect this trend through the end of the year. There will be “spurts” where there is lots of buying activity and the numbers will tend to stay flat. This will, however, change beginning January 2006.”

“In August there was an increase in the number of “new” listings when compared to the same month in 2004. New listings are up by 5.08 percent. In our local market, the Austin area is still flat to a slight upward trend, we will probably see a decline in the numbers due to the time of year. It is normal in a market like ours to see fewer buyers in the fall through the end of the year. Sellers must look very closely at price. With fewer buyers at this time of year, they will be competing more strenuously. We can still expect the homes that are staged to show the very best and have the best price per square foot to be the first ones to sell.”