By Leah Draffen | Builder
The receding housing market is affecting all cities throughout the nation. However, some areas have felt the wake of its effect sooner. According to Zonda market reports, including unsold inventory, these four cities are hopeful for only short-term concerns and rapid rebounds.
- Austin, Texas
As rates have increased and market sentiment has become negative, new-home sales have dropped while inventory levels have been relatively contained. Bryan Glasshagel, senior vice president at Zonda Advisory says, “According to our data, new-home sales contracts dropped 31% in June. FOMO is gone.”
Zonda’s market report for Austin-Round Rock-Georgetown shows that quarterly housing starts increased 14.6% over a year ago as available vacant developed lots sit at 27,149, up 4.7% over the same quarter last year. This means that the area is 4.55% oversupplied.
For Austin alone, there are 18,260 new homes under construction and not yet closed. Glasshagel explains, “Roughly 30% of those [18,260] likely are not under contract with buyers. That equates to 5,240 potential inventory homes—three months of supply. If you build in a cancellation factor for the backlog under contract with buyers, you could get to four, five, or six months of inventory. That would have negative pricing implications in the market.”
