Seriously builders. Stop! Right now in MLS Area 11, AKA Preston Hollow to area Realtors, there are 140 homes available that were built in 2005 or after. Moreover, there are 213 homes available over $1 million. The kicker is that only 15 sold last month. My fuzzy math tells me that is almost 15 months of inventory currently sitting on the market which is muy malo. But that's great compared with the 33 months of inventory that was available in September. Yes, you heard that right. What's even more disturbing is that 106 of the homes currently available were built in 2007, 22 homes built in 2006 have never sold to anyone and 5 homes built in 2005 have still not sold. That means that only 7 homes (give or take) actually have real owners that need to sell. Every other home is builder owned and most likely sitting there vacant.
The law of supply and demand says, and I repeat, when inventory is on the rise, prices go down. I have personally sold a few homes in Preston Hollow where the sellers have taken a loss at closing. In November of '05, '06 and '07, 119, 187 and 227 homes were available over $1 million, respectively. That is a 64% increase in the number of $1 million homes available since November 2005. With that said, prices should be going down, right?
In 2005 the average sales price for homes over $1 million was $1.614 million and in 2007 the average sales price is $1,898,966. That's about a 15% rise in sales price over 2 years. What does this mean for the future? I think unless some of these builders scale back, poor Preston Hollow's $1 million and up new and resale market is going to tank. (It already has if you ask some of the current sellers whose asking price is below what they paid in 2001) My advice to buyers right now would be to check out some of the 130 new construction homes and throw offers at these builders. Those carrying costs start to add up after 2 years sitting vacant!