Austin Housing Market Report February 2024

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As spring arrives, the Austin housing market is entering its busiest season, presenting opportunities for buyers and sellers. Sellers can benefit from increased median sales prices and homes selling close to their list price. Meanwhile, buyers have more negotiating power. Homes are taking an average of 83 days to sell, and new listings are up 45% year-over-year, which provides more options for buyers. Additionally, the 1.3% rise in closed sales suggests a growing number of buyers returning to the market, leading to increased sales. The surge in new listings offers more options for homebuyers.

Let's dive into the latest trends and what they mean for you:

• Home prices increase monthly – Median home prices increased by 3% from January to February and increased by 1% annually.
• Decreased withdrawn listings – The number of listings removed from the market declined by 25% from January to February, indicating a strengthening trend in market activity.
• Less time on the market – Homes now remain on the market for an average of 83 days, down by 1 day from a year ago and 3 days from last month.
• Rise in new listings - New listings surged by 28% monthly and 44% annually, boosting confidence in the market.
• Lower buyer demand – Monthly demand decreased by 23% from January to February this year and declined by 15% compared to last year.
• Increase in home sales – Home sales increased by 1% compared to last year and increased by 28% from January.
• Housing supply and inventory – Housing supply currently stands at 3.0 months, up from 2.6 months last February.
• Current market snapshot – Over 7,000 homes are for sale, selling for 95% of their original listing price.

Sellers' Advantage in Today's Real Estate Market

Sellers continue to hold a strong position, capitalizing on sustained demand even as housing inventory stabilizes. Despite a slight uptick in available properties, the seller's market endures, driving ongoing buyer competition. 

"With expert guidance from a seasoned real estate advisor, sellers can strategically prepare their listings and establish competitive prices to entice eager buyers," advised Tom Thornton, Agent Success Manager at Realty Austin Compass. “Given current market conditions, navigating the spring housing market is hyperlocal and requires patience and flexibility.”

Is Now the Right Time to Buy?

As we head into the spring homebuying season, more buyers are entering the market. Insights from Fannie Mae and Pulsenomics' Home Price Expectations Survey indicate ongoing growth in home prices, expected to average between 3-4% annually over the next five years. Delaying a home purchase could lead to higher costs in the future.

“Experts predict steady appreciation in home values, making now an opportune time to invest in future wealth accumulation. Knowing that prices are expected to rise should give you confidence in buying a home, as it signifies your home is an asset poised to increase in value over time,” advised Jennifer Korba, Agent Success Manager at Realty Austin Compass.

Mortgage Rates Edge Down Slightly
According to Mortgage Daily News, mortgage rates have fluctuated recently. The average rate for a 30-year fixed home loan dropped to 6.91% on March 27th, down from 7.16% the previous month. While rates have decreased from their peak in 2023, they remain in the mid-to-high 6% range, with no significant drop expected soon. 

"Understanding how mortgage rates impact affordability and monthly payments is crucial for homebuyers," says Amanda Dudley, Agent Success Manager at Realty Austin Compass. “With the Federal Reserve's cautious approach to interest rates, buyers and sellers must stay informed and adaptable as they navigate the changing dynamics of the housing market.”

Sellers Are Back For Spring

"The first couple of months of 2024 have been positive for seller confidence," stated John Coake, Head of Sales at Realty Austin Compass, reflecting on the surge in new listings entering the market. “The increase in listings bolsters optimism in the real estate market for the upcoming spring season.” 

Moreover, sellers have ample equity at their disposal. According to analytics firm CoreLogic, the average homeowner with a mortgage closed the year with $298,000 in equity, marking a gain of over $24,000 in the fourth quarter alone.

Residential Construction Sees Growth

According to the U.S. Census Bureau and the Department of Housing and Urban Development, the housing market saw a significant increase in residential construction activity in February 2024. Building permits rose compared to the previous year, indicating more homes are planned for construction. Also, housing starts experienced a notable uptick, especially in single-family homes. This surge in construction suggests an expanding supply of new homes, providing buyers with more options and potentially reducing market competition.

Austin Ranks 4th Among Top 50 Metros Nationally

According to the latest CenTex Economy report, Austin's strong economic performance ranks fourth among the top 50 metros, with 2.7% job growth over the past year. Sectors like construction, natural resources, and other services saw the most significant expansion. With a steady unemployment rate of 3.4% in January, Austin remains a resilient economic hub. Benchmark revisions reveal even stronger job creation than initially estimated, emphasizing Austin's position as a regional economic leader.

Buying or selling a home is a big purchase, and it’s our job to ensure you get it right. Our team of real estate professionals has the inside scoop you won't find online. We'll dig deep into every detail, weigh your options, and ensure you get the best deal. With us, you'll save money, keep cool, and feel confident in your decision. You deserve top-notch representation, and that's exactly what we deliver.

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