January 2008

Happy New Year!

Hello again my Neighbors, Friends and Family,

Wow, is it 2008 already? How the time flies and seems to accelerate year after year. January is such a great opportunity every year for a fresh beginning, tabula rasa, as they say.

First, I would like to apologize for the late newsletter. As many of you know I was out of town visiting family the last week of December and I took a little break from the number crunch. To make this up to you I have included lots of statistics for you this month. I’ve included three graphs, area 2 market supply (If anyone needs another MLS area map, shoot me an email and I’ll send you a PDF file map), the MLS supply of homes priced under 500K versus those over 500K, and the supply of homes and median price for Austin from 1990 to 2007.

One more thing, I have some 2008 passbooks to give away as well. The first three people to contact me with the answer to the following question will get a passbook.

In 1972, who did the Miami Dolphins lose a football game to?

Again, I’d like to thank everyone for your continued support over the past four years. And remember, I am never too busy for your questions, concerns or referrals. In closing, Happy Birthday to Martin Luther King Jr.

Sincerely,

Michael A. Quinones
REALTOR

MLS home supply of <500K vs. >500K

The most common question I hear is, “How’s the market?” My response is always the same," It depends on the location or micro-market.” Market performance, as you will see, also depends on price. This month, I’ve decided to include an example of performance between two different markets, homes priced <500K versus those >500K. The graph below shows the home inventory for the two markets from January 2004 to November of 2007.

The difference in inventory between homes <500K and those >500K is an average of 7.1 months. In other words, if there were no new listings, homes priced above 500K would take an average of 7.1 more months to sell the existing inventory versus those priced below 500K (So, if you plan to flip a house from 350K to 700K, be VERY careful or plan to move into it.)

In January 2004 the supply of homes was 8.3 for <500K and 17.9 for >500K. In November 2007 the supply YTD was 3.3 for <500K and 9.5 for >500K. The low for both markets occurred in 2006 when it was 2.7 in December for <500K and 7.1 in September for >500K. Average supply for this period was 4.4 and 11.5 months for <500K and >500K, respectively.

After researching and graphing the supply of homes for these two markets I realized how evident the seasonal cycle of the market becomes. Understand that when I calculate supply I use year-to-date sales to capture market velocity and to help regulate the monthly spikes or irregularities. Part of the reason the lowest supply (or time of highest demand) occurs in the fall is that many of the homes that were pending during late summer don’t actually close until early fall (Typically, escrow ranges from 20 to 45 days depending on the type of loan, how busy the lender is and the situation of the principals to the transaction.) Also, most sellers understand the cycle and list in the summer when possible, therefore, the overall number of new listings will drop during the fall months.