South Austin 78704 Market Statistics: What Will 2011 Bring?
As 2010 ends & 2011 begins, it's good to look at where we've been to see where we might be heading. In the middle of the summer of 2010, Austin was facing the highest levels of inventory in its history & buyers, well, were not there to meet the increase in supply...it was an especially long summer for home sellers.
But in my own bubble of South Austin, I've noticed a recent string of buyers having trouble finding these "deals" they hear about in the national narrative. There has been a steady decrease in the number of houses for sale in 78704, so I pulled the numbers together to try to get a clearer picture of what's going on.
A decrease in the number of homes for sale in 78704 means nothing unless we look at what's really behind the drop:
We see a steady drop in the number of new listings in 78704 from it's peak of 58 in July down to 24 in December. The number of expired listings has remained pretty steady until a jump in December (more on that later.) And finally the number of sold homes has remained largely flat, moving between 19 & 26 homes per month. The other category not shown is the number of homes that have been withdrawn from the market, prior to the listing expiration date. This is more difficult number to track but seems to be on pace with the number of expired listings.
So what does this all mean? Basically, it should come as no shock to anyone that most of the inventory is not being absorbed through property sales, but mainly due to expired or withdrawn listings that are not being re-listed. It's a good news / bad news scenario: on one hand, the market is self-correcting by removing so much inventory - on the other hand, the inventory is not being sold, rather, it's being held for a later date.
A final graph shows the average months of inventory which is taken by dividing the number of homes on the market by the number under contract. A neutral market (neither a seller's or buyer's market) is generally assumed to be at 6 months (less than 6 months, a seller's market - more than 6 months, a buyer's market):
What the decrease in inventory has brought us is a return to a neutral market at 5.8 months of inventory, down from the 8.3 months of inventory in July. Again, the decrease of inventory has brought us here instead of an increase in buyer activity. But at least we're starting 2011 in a manageable position here in 78704.
What 2011 brings is anyone's guess. I suspect we'll see more homes on the market as seller's hope that spring 2011 is, indeed, the return of housing prosperity. Buyer activity should increase as well due to still historically low interest rates (that have been showing signs of heading northward) and a belief amongst many that the worst is at (or very near) the end. But it remains to be seen whether it's supply or demand that outpaces the other. If the current trend continues, we may likely see it remain neutral for some time to come.
So whether you are a home seller or a home buyer in 2011, I think you'll do fine. If you home has not been listed in the past year or so, you may be competing largely with homes that have tried themselves on the market recently & failed. By getting your home ready for sale & pricing it correctly, you may be pleasantly surprised with the results. As a home buyer, rates should still be held in check & neighborhoods will be at the most affordable in years. If you're looking for a long-term investment, it'll be a great year to buy. Either way, it should be an interesting year.
Rob Albertson is a Realtor and proud South Austinite for over 10 years. He specializes in South Austin Homes for Austin Fine Properties, a Private Label Realty Company, and can be reached at 512.653.8939 or rob@austinfineproperties.com.
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