78704. A lot of investors were led by their agents to central areas like zip 78704 (Soco/South Soco). That market is now in a slump. There were 96 homes on market and only 8 sold. Even worse...hundreds of condos are coming soon. ADVICE: Sellers should stay priced under $300-350k for the fastest sale. Keep price per square foot competitive and negotiate with the buyer ...or you'll regret it.

East Central Austin. The average days on market for Area 3 in East Austin was 120. Home sales in zips 78702 (Area 5) and 78723 slowed significantly due to unusually-fast appreciation in 2005 and 2006. Sellers have finally started to realize this, so are dropping prices and offering financing incentives.

AUSTIN REAL ESTATE MARKET SUMMARY

HINT: If a television or newspaper reporter says an area is "hot", it's too late to get a good deal as a buyer. Go to areas where sellers don't think their homes are laden with gold, but there are strong growth factors. At the very least, carefully evaluate the particular home you're buying to make sure it's right for you. Don't bet on appreciation.

If you didn't purchase during the latter half of 2007, you may compete with other buyers in certain hot areas of North and South Austin (see the Austin market update slideshow). Other areas are still game. Your agent will determine the average days on market for a given area so you determine how to best write your offer.

READ MORE MARKET NEWS

• Realty Times Market Conditions for Austin.
• Steve Crossland's January 2008 Market Update.
• Our Austin Market Update from November 2007
• Year End Austin Market Update: Winners and Losers in 2007.
• Is the U.S. Housing Gloom Lifting?
• Top Trend in 2008: Green Real Estate
• Why Austin Real Estate will bloom in 2010.