Below is the breakdown of June 2009 home sales in Austin. Our median price range is roughly at $200K, so about half of all sales for June fall into the first two price ranges below $200K. The second colum shows Average days on market for homes sold in each price range.
The third column shows the number of home active for sale as of July 30, 2009. The last column shows the number of months it would take for every active home to be absorbed by the market at the current rate of home sales. Current rate is calculated by averaging the trailing three month’s sales.
|Price Range||Number Sold||Avg Days on Mkt||Active July 2009||Months Inventory|
|$149,999 or under||494||59||1581||3.39|
|$150,000 – $199,999||498||62||1741||4.18|
|$200,000 – $249,999||320||77||1157||4.28|
|$250,000 – $299,999||230||78||1026||5.55|
|$300,000 – $349,999||119||105||706||6.83|
|$350,000 – $399,999||89||105||694||8.71|
|$400,000 – $449,999||65||83||440||7.90|
|$450,000 – $499,999||49||126||426||10.92|
|$500,000 – $549,999||31||104||237||9.00|
|$550,000 – $599,999||19||107||274||17.87|
|$600,000 – $699,999||33||156||365||13.52|
|$700,000 – $799,999||19||150||231||18.24|
|$800,000 – $899,999||13||125||188||21.69|
|$900,000 – $999,999||7||124||136||25.50|
|$1,000,000 or over||25||125||643||35.07|
What do the “month’s of inventory” mean?
Generally, a “balanced” market in which neither the buyer or seller have an advantage is determined by about 6 month’s inventory, really 5 to 7, but 6 is the commonly used number. So as we see above, homes in Austin that are priced below $200K are seeing strong demand and are selling in less than 60 days. All homes below $250K are technically in a “seller’s” market, though this also depends on location and other factors.
At the other end of the spectrum, only 25 $1M+ homes sold in June, yet there are 643 currently on the market for sale. It would take three years for all of these homes to sell at the current absorption rate, and with no new listings being added to the market. In general, anything priced over $500K in Austin will see slower demand at present.
The month’s of inventory is just another tool we use to evaluate the market in genweral, along with the days on market. As you can see, higher months of inventory correlates almost in perfect sync with higher days on market.