Sales of existing single family homes rose 3.1 percent in July 2008 as lower prices proved attractive to home buyers in the real estate market, according to this article in the Austin American Statesman dated August 26, 2008. However, the inventory of houses for sale rose at the same time, possibly indicating a further price drop. So, the 3.1 percent increase in sales was good news for those economists who predicted an increase of less than half of that – or about 1.2 percent.

Contrary to all this, home sales prices in Central Texas have not declined. In fact, the price for a single family home rose 3 percent and sales dropped 21 percent compared to July 2007.

Many feel home sales could be even brisker except for a couple of factors that are driving the market at this point. The feeling among buyers is that prices could drop further, as they see more houses come on the market and inventory rising. The rising tide of foreclosures and reluctance on the part of lenders to finance real estate purchasing are keeping many off the market.  At the current rate of sales, the inventory stands at 11.2 months’ depth of real estate currently on the market.

The National Association of Realtors reported that the overall supply of housing rose nearly 4 percent in July. Additionally a significant number of apartments and condominiums entered the market. Single family home sales would probably be higher if all those wishing to sell their home actually had the house on the market instead of pulling it off in the face of weak demand and eroding prices as observed by Joshua Shapiro, the Chief Economists at MFR a New York Research firm.