(Area defined by: North of 35th St., West of MoPac, East of Lake Austin & South of 2222)
- There are currently 26 luxury homes available in this area with 7 others currently under contract. Over the last 3 months 8 luxury homes have sold. At this rate of absorption there is 10 months worth of inventory. Things were somewhat active last fall in 1B north and activity increased during the holidays and early in the year. Since that time the pace has slowed. However, 7 pending homes is a healthy sign and shows a rate of increasing activity, and I anticipate this higher activity to continue.
The activity in the $500k to $999k range accounts for almost 90% of the areas luxury sales, this is higher than normal. There are currently 13 homes available but only 2 of the 7 pending homes is in this price range. Over the last 3 months 7 homes have sold between $500k and $999k. With this rate of absorption there is 5.6 months of inventory, which is significantly better than the ULRA luxury market.
The activity in the ULTRA luxury market, $999 and up, has been very slow over the past three months but we have seen much more activity recently (5 pending homes is a strong indicator). There are currently 14 active homes available and 5 pending sales in this market. Over the last 3 months 1 ULTRA home has sold yielding an absorption rate of .33 homes a month. At this rate there is currently 42 months of inventory. We have seen these buyers start to enter the market because jumbo rates have been so attractive and all signs point to a stronger real estate market. The very negative absorption rate is more of a statistical number, and doesn’t accurately show market forces. 5 pending sales shows strong buyer activity in this market and once these close the absorption rate will be much more favorable.
Final Thoughts: The activity below $1 million has been solid and accounts for almost 90% of the sales. The ULTRA market has been very slow until recently. Luxury sellers have held firm on their pricing and this indicates a stronger market (last fall much of the luxury market was discounting their homes to find real buyers). The market data is somewhat skewed because of the high number of pending sales that have yet to close. As those homes close the numbers will be much more favorable, but I will be interested to see if 1B can keep up this pace. My though is activity in the $500 to $999 range will increase and the $1 million + activity will stay solid but slow some in the next months.
Best,
Marcus
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