Last week, I looked at what the second half of 2010 looked like for 78704 & gave my best guess for the start of 2011. I was curious to see if similar trends exist in Southwest Austin's 78749 zip code.
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.
Just as in 78704, there has been a steady decrease in the number of houses for sale in 78749 since the peak of summer (and the peak of inventory levels):
A decrease in the number of homes for sale in 78749 means nothing unless we look at what's really behind the drop:
We see a quick drop in the number of new listings in 78749 from it's peak of 66 in July down to 35 in September where it holds pretty steady for the rest of the year. The number of expired listings has fluctuated between 21 & 32 and ended the year at 24 in December. And finally the number of sold homes has come down from its peak of 55 in July (which can largely be attributed to closings from the home buyer tax credit) to bounce between 22 & 36. The other category not shown is the number of homes that have been withdrawn from the market, prior to the listing expiration date.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? Well, it seems the home sellers in 78749 quickly realized that the market was vastly different for the back half of 2010 than it was for the first half. We see a rapid adjustment of inventory leaving the market, starting off mostly through expired & withdrawn listings instead of sold inventory. But as 2010 goes, sales remain strong with decreased levels of inventory entering the market, thus self-correctly to a pretty strong housing market. Now, not all the news is good - much of the expired & withdrawn inventory was not relisted, rather held (presumably) for better market signs in the future.
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 this shows is how quickly 78749 was able to move from a neutral market (which felt much more like a buyer's market) in July to a fairly competitive market at the end of 2010.
Just as in 78704, what 2011 brings to 78749 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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