Looking back at a post I did yesterday about current Austin real estate market stats made me want to take a deeper look at the Lake South (LS) Area of the MLS. I posted yestarday on one of my blogs that the LS Area had 725 homes on the market and that the days on market (time to sell) was high. If you know the LS area you might wonder why it is so "slow." I have a theory about that.

Te help understand this, take a look at an Austin MLS map.  LS is what 8W used to be. About 20 years ago, 8W was close to downtown and UT, in the Hill Country with all of its beauty, had lake property and had the best school district in Central Texas. Although costly, it wasn't out of sight expensive. Fast forward to 2005 and beyond. Area 8W is all but built out. The schools are still amazing and it is no longer suburban - it really is Austin. Look at LS - again, the MLS map will help here. LS is reasonably close to downtown and UT (by today's standards), it has an excellent school district in the Lake Travis ISD, is in the Hill Country with all of its beauty and it has Lake Travis running along one side. The final thing that makes LS so appealing is that it will soon have almost everything anyone needs with the addition of the Hill Country Galleria Mall and a new hospital that is rumored to come in.

Now let's look at some statistics from the Austin Board of REALTORS®.  As of today, May 21, 2007, there are 726 single-family homes on the market in LS. There are 296 that have a built date of 2005 and 265 with a built date of 2006. What that tells me is that builders have gone crazy in this area. They have seen the demand and have overbuilt and they are still building. There are only 165 "resale" (not new) homes on the market in Lake South. Now let's look at affordability.

Of the homes on the market in LS, only 20 are priced under $200,000. With the median price of a home in Austin at $185,000 in April, I would say that LS isn't exactly affordable for most buyers. In the $200,000 to $299,999 price range there are 83 homes on the market. Between $300,000 and $499,999, we have 211 homes on the market. From $500,000 to $799,999 there are 198 homes available. From $800,000 to $999,999 there are 73 homes on the market and there are 141 homes on the market priced at over $1 million. The most expensive home on the market right now is a 12,000 square foot home on 14 acres on Lake Travis and it is listed for $8.3 million.  These prices are in a similar range in terms of affordability as prices in 8W were 20 years ago.

Conclusion? This is probably a good time to buy if you are looking at a home that is either new or that was purchased before1998 you can probably do pretty well. People who bought between 1999 and 2001 probably haven't seen enough appreciation to get much back if they sell. There is still a lot of room for new homes in LS and I see a lot of building continuing for about 10 years assuming that our economy remains healthy. With all the new homes coming in I see difficulty with resales unless the sellers are very realistic about pricing their homes to sell.