Austin Market Conditions

Austin, Texas, the 4th largest city in Texas, saw demand drop 10 percent at the end of summer, despite an increase in inventory of homes on the market. Supply rose 21 percent in August of this year.

Despite these figures, CNNMoney reports projects that Austin will see a 4.7 percent growth appreciation rate in 2008.

For now, the average sales price is up 16 percent for the year to $256,000.

Local expert Delilah Fuentes reports, "Though the Austin housing market is not as robust as it was in 2006, the area is still outperforming most U.S. markets."

Add these factors to a median household income of $64,000, and you have yourself one affordable city, which ranked on CNNMoney's "Best Places to Live" list in 2006.