The median single family home price in AUSTIN for the week of August 1, 2008 was $329,500. The 5448 homes have been on the market for an average of 103 days.

 

 

Inventory and days-on-market are climbing, while the Market Action Index has been flat recently. The trends point to a weakening market.

 

The market’s downward trends shared across both price and value. People are recently placing less value on homes (you can see recent declines in price per foot as evidence.) Look for significant changes in the Market Action Index as a precursor and value changes, possibly inflection points for good investment opportunities.

 

 

Inventory has been climbing lately. Note that rising inventory alone does not signal a weakening market. Look to the Market Action Index and Days on Market trends to gauge whether buyer interest is keeping up with available supply.

 

Residential house prices are a function of supply and demand, and market conditions can be characterized by analyzing those factors. Watch this index for sustained changes: if the index falls into the Buyer’s Market zone for a long period, prices are likely in for a downward correction.

 

 

 

The Market Action Index (MAI) illustrates the balance between supply and demand

using a statistical function of the current rate of sale versus current inventory. An MAI value greater than 30 typically indicates a “Seller’s Market” (a.k.a. "Hot Market") because demand is high enough to quickly gobble up available supply. A hot market will typically cause prices to rise. MAI values below 30 indicate a "Buyer’s Market" (a.k.a. "Cold Market") where the inventory of already-listed homes is sufficient to last several months at the current rate of sales. A cold market will typically cause prices to fall.

 

The AUSTIN market is currently quite strongly in the Buyer’s Market zone (below 30). The 90-day Market Action Index stands at 16. With several months of inventory available at the current sales rate, buyers should find ample choice. The market has settled in at a relative stasis in inventory and sales conditions. It’s a Buyer’s market that has seen prices trend lower. Expect that consistent up trends in demand will be required before price trends change significantly.

 

The properties have been on the market for an average of 103 days. Half of the listings have come newly on the market in the past 70 or so days. 

 

The National Association of Realtors® has predicted a recovery in the housing market and increased sales in the second half of this year. Austin real estate sales have remained relatively flat for the last 6 months, which is an indication of stabilization in the market after the dramatic decline last summer.

 

Conventional wisdom has always been to buy low and sell high, making now an excellent time to buy Austin real estate.

 

The Housing and Economic Recovery Act that was signed into law last week by President Bush is also good news for Austin home buyers. The new legislation includes a $7,500 tax credit for first- time buyers.  So, don’t hesitate! Take advantage of low interest rates, a tax credit and plenty of inventory to choose from.