Austin Housing Market Report February 2023

In today's market, it's crucial to adopt fresh tactics and strategies to succeed. Partnering with experienced agents and staying up-to-date with the latest market trends in your area can help you make informed decisions that set you up for a successful future.

The Austin housing market is showing signs of new life this spring. Pending sales are holding steady or beginning to rise in and around the greater Austin area. Additionally, monthly inventory levels have risen year over year to 2.6 months, providing buyers more options as they navigate the market. However, months of inventory have declined in recent months from their high of 3.2 months of inventory in October 2022.  

Home builder confidence is also growing as the housing market stabilizes. Taylor Jackson, CEO of the Home Builders Association of Greater Austin, noted that builders have a renewed sense of optimism in the direction the market is heading, evidenced by fewer contract cancellations and minimized supply shortages.

So, what happened in the Austin housing market in February 2023? Let’s take a closer look:

• The number of homes for sale increased by 499% year over year, driven by homes sitting on the market for a longer time. 

• The average days on the market increased to 84 days, up by 55 days, compared to a year ago.

• The number of new listings entering the market increased by 1%, compared to a year ago. Although new listings decreased by 7% from January to February 2023, mid-March data shows new listings trending up.

• The number of homes under contract fell by 9%, compared to a year ago, but are currently holding steady week over week. Although January to February 2023 saw a slight 4% decrease in contracts, pending sales are trending up in March.

• The number of homes sold fell by 17% compared to a year ago. However, closed sales are trending up from January through mid-March 2023, indicating buyer activity is picking up as we head into spring.

• Monthly inventory levels are at 2.6 months, compared to historic lows of 0.4 months in February 2022. 

• Median home sale prices decreased by 12% year over year to $436K. Prices have been falling since hitting their all-time high in May of 2022 at $550K.

• Over 7,000 homes are for sale and over 3,000 homes have reduced their price in the past 30 days. This represents a buying opportunity for many as the market stabilizes.

Builders Are Ramping Up 

Increasing for the first time in six months, housing starts nationwide shot up 9.8% in February, with both single-family and multi-unit projects posting gains. Building permits did even better—up 13.8% nationwide, the largest monthly gain in two years.

Home builders are feeling more optimistic. The homebuilder sentiment index headed up for the third straight month, indicating the housing market is starting to find its footing in the present mortgage rate environment.

Buyer Demand Is Ticking Up

Active inventory is currently up 499% from a year ago. Homes are spending more time on the market than last year, but buyer demand is returning as pending sales begin to trend up in March as we enter the spring market.

Home Pricing & Accessibility

Home-buying activity has been reported as surprisingly resilient, however the level of demand does not change the view that home prices will be flat to slightly down for the year. In Austin, home prices have continued to fall since their peak in May of 2022, mainly due to higher and fluctuating mortgage rates. Therefore, incentives, creative financing options, down payment assistance, and accessible housing remain essential for buyers in this market. 

For first-time homebuyers, debunking myths about down payments and learning about resources that can help overcome this hurdle is a pro tip that could make all the difference.

Housing Inventory & The Spring Selling Season

Despite major gains year over year, monthly inventory levels have remained relatively flat for the past three months. In December 2022 and January 2023, 2.7 months of housing inventory were reported, and February 2023 slightly decreased to 2.6 months. Typically, February marks the lowest point for housing inventory during the year as sellers return to the market in time for spring.

According to Jolene Weinstein, Chief Operating Officer at Realty Austin, “We don’t expect to see significant increases in housing inventory in the near future. However, some additional homes are likely to become available in the coming weeks, as would typically happen in the spring. The timing and uptick in housing inventory is following pre-pandemic seasonal patterns, but so far the size of the uptick is nowhere near what it normally would be. This trend is expected to continue throughout the rest of the year.”

John Coake, Head of Sales at Realty Austin said, “For homes that are well-priced, our agents are still seeing multiple offers and an increase in buyer and open house activity. Real estate is hyper-local right now, with different neighborhoods experiencing varying trends and dynamics. Buyers and sellers will want to work with a skilled real estate advisor in this market as the supply of homes available will remain tight this year. Pricing your home right is crucial.”

Partnering with a knowledgeable real estate agent can help you make informed decisions that align with your goals in this complex housing market. Your REALTOR® can provide detailed market analysis and guide you through all available options for buying, selling, or renting, equipped with powerful MLS data and boots-on-the-ground expertise. The resources and solutions provided in this blog can help you stay informed on the latest market insights and trends, giving you the confidence to jump in and achieve a successful outcome for your future.

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