Mark Sprague, of Residential Strategies Inc., gave his middle of the year update and forecast for the Austin housing market yesterday.  He presented his data and predictions to the Home Builders Association of Greater Austin.  Sprague said much of the same things he said a year ago, but was more specific about timing.  What he talked about was the fact that developers have slowed down on planning new subdivisions and that the inventory of available lots is shrinking.  He also talked about home starts being way down this year.

Also talked about is what Austin REALTORS have been seeing lately - lots of first-time buyers taking advantage of the tax credit.  The inventory of homes in lower price ranges is shrinking and a lot of the new construction is being absorbed.  Shrinking supply combined with fewer home starts should see prices stabilize and then rise next year.

Sprague also suggested that now is a good time to buy.  What he was talking about was the historically low interest rates that they can not stay this low much longer combined with shrinking inventory.  This may be true at the low end, but what about higher price points?

Area REALTORS know that it homes have been selling much more in the lower price ranges.  Higher price points are still slow and are likely to remain slow until prices come down more.  Out in the south Lake Travis area I have seen the price of some higher end new homes come down $50,000 to $100,000 or more in price.  So it may be a good time to buy one of these homes as well.  When the new construction sells, builders aren't likely to put up many specs and prices will go up.  I don't see this happening as quickly at the high end at the low end, but it will happen eventually.

See the story here.

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