If you have read my last two posts, you will know that homes sales in Austin have slowed.  Now homes in Austin have sat longer and longer and as a result, builders have slowed starts dramatically.  For example, the subdivision of Apache Shores has a lot of new homes not selling very quickly.  There are 31 Active listings for homes built in 2007 or later in Apache Shores.  Four are under contract and five have sold this year.  That isn't terrible, but it isn't at all how things looked nine months ago.

The same can be said for most of the Lake South area of the MLS.  What I expect to see and have just started to see is many of the new homes going up for lease.  Investors who have money in these are going to have a hard time continuing to pay the carrying costs for new homes that are not selling.  If they can lease, at least the bleeding won't be as bad.  In the Lake South Area of the MLS, there is currently over 11 months of inventory in the $350,000 to $649,999 price range.  From $650,000 to $1 million there is around a 9 month supply.  This isn't great, but the Lake South area is looking quite a bit better than it did 90 days ago.

Builders in Apache Shores and the rest of Lake South have slowed the number of starts and that has helped quite a bit.  A month ago there was more than a 7 month supply of new homes in Apache Shores.  Today that number is down to 4 months.

I know that these small area are not representative of the entire area, but the numbers do tell a story.  My hope is that inventory will continue to drop and builders will build more slowly in areas like these until we get back to a market that more in line with what we had a year ago.