The supply of homes on the market is an excellent indicator of the health of each particular region. A recent report from the MLS system shows months of inventory broken down by areas within the Austin metropolitan region.
The report shows data as it existed in the MLS databases as of December 6, 2010. The data looks at the number of current listings and compares that to the average sales rate per month over the past 12 months. The result is the number of months of inventory that is currently on the market.
Analysts typically use 6 months inventory as equilibrium. Less than 6 months of inventory indicates a seller’s market as there are fewer homes per buyer. More than 6 months of inventory is regarded as a buyer’s market.
Here is the breakdown by region:
The report shows that overall Austin is below the 6 month equilibrium mark and is currently in a seller’s market. The headlines may be filled with anecdotal evidence that the market is tough right now, but the data speaks for itself.