Austin Real Estate Scene

“Understand that a 2-month supply is considered a very healthy inventory of houses in the market,” RSI pointed out. It could get even better as the year winds down because the number of home sales that are closing is outpacing the number of new homes that are starting. RSI reported that “in all likelihood, Austin will see the finished inventory level get even tighter.” “As a result, with the generally tight supply of finished units available in the market, Austin is not nearly as susceptible to the discounting and incentives that are pervasive in so many other markets. Likewise, too, with the tight inventory, RSI would expect to see a greater number of starts in the coming quarters.” “The other good news concerns lots,” reported RSI. Even though the number of vacant available lots is creeping up, the lot supply in Austin is at 22.4 months, still under a 24-month supply, which RSI considers equilibrium. Elsewhere in the country it is considerably higher.

What about the challenges, including the national gloom-and-doom news that dominates the reports on the national housing market? “Without question, the negative national housing story has adversely affected the Austin consumer sentiment, and changes in the mortgage qualification process will limit the number of entry level buyers that can qualify for a house,” RSI points out. What else? “Certainly the sales pace of homes in the area has moderated over the past year,” RSI noted. “Traffic is down and there is not much buyer urgency.”

“In discussions with builders, it is clear that the negative national news regarding the housing and mortgage markets has crept into the psyche of the buyer, and that the buyer is generally more cautious today than he was a year ago,” RSI said. “This likely is the biggest reason that Austin buyer traffic has been off recently.”