Austin Home Sales Drop; Still Better Than Nation

Home sales fell over 22 percent in January nationwide, with median prices down 5 percent. The market is saturated with a 10-month supply of houses for sale. In the Austin area, however, sales fell only 10 percent and the number of homes on the market rose 24 percent – a mere 4 ½ month supply.

While the Austin market remains fairly resilient for the time being, experts say this trend is not a good thing for the long run. Tougher loan requirements coupled with lack of investor interest are helping to feed the slowdown that began mid-year in 2007. It's a definite buyers market right now as mortgage interest rates remain below 6 percent. With experts predicting another slight drop in sales of between 5 and 10 percent by the end of 2008, sellers need to be more realistic about the price and the length of time it will take to move the home. Currently, it's taking nearly three months and sellers need to be prepared to drop their prices in accordance with the difficult market.

As construction of new homes slows, buyers are looking to the resale market more and more and it's hoped this will help move existing inventory. Central Texas remains a hot spot for relocation, however, and this will help to keep the real estate market strong in the Austin area.

Joe