Current Market Stats for 78722

Current Market Stats for 78722

I tend to work in a smaller area of Austin than many of my colleagues. I believe in specialization (and trying to avoid traffic at all costs.) So I end up spending my days in South Austin (specifically 78704, 78745, & 78749), while also venturing into the eastside zips of 78722 & 78723.

I’m also a finance guy (okay I was an English major too, go figure) so I love diving into market stats to try to figure out what’s going on out there in the market. Over the past couple weeks, I looked at what was going on in my beloved South Austin, and thought I’d see if similar trends were occurring in my eastside pockets of 78722 & 78723.

So just after the expiration of April’s first time home buyer tax credit, Austin was facing the highest levels of inventory in its history and buyers were seemingly no where to be found. It was a difficult summer, especially since everyone expected the party to continue from the spring on through the summer. It look a number of months before inventory levels adjusted to more manageable levels, as evidenced by the graph below:

So what happened? What was the reason for the drop in inventory in 78722: was it homes being sold, listings expiring, or just a stop of all new homes onto the market? The next graph helps to spell it out:

Unlike some other areas in the city, it took a little while for new listings in 78722 to slow down since the summertime peak. In fact, we saw 14 new listings come on in September alone before a rapid slowdown to 3 in both November & December. The number of expired listings peaked in October at 9 before falling off again in November & December. As for the number of homes sold, it has remained pretty constant, moving between 4 & 6 homes per month. The only category not shown is home withdrawn from the market (to mostly likely return again soon), as this can be a tricky one to track accurately…but they are certainly out there.

So what does this all mean? Perhaps the most helpful graph is one showing the average months of inventory. It’s figured 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 we can move from a buyer’s market into a seller’s market with a rapid adjustment in the level of homes for sale. Now, it also means that a rapid rise in the number of homes on the market in 78722 can quickly turn this around without an adequate number of buyers to meet supply.

The good news is we’re starting off 2011 in a great place…but if the expired and withdrawn listings make a rapid comeback, we could see a return to excessive inventory levels. Whether the rising interest rates or the more promising economic news will be enough to push buyers back into the market is still anyone’s guess. But it’ll certainly be interesting to watch & track how the market progress this year.

As a home seller in 78722, the start of 2011 seems promising for well-conditioned & well-priced homes. But it will be wise to watch changes in the market closely, as inventory could begin to build up rapidly.

As a home buyer in 78722, good homes at reasonable prices should begin to come on the market…but competition for the best homes could be substantial, at least in the short term. And with rising rental rates, owning a home could prove to be more economical than leasing.

Here’s to an interesting 2011…

Rob Albertson specializes in East Austin Homes & 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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