In the ever-evolving Austin housing market, staying up-to-date with the latest trends and market conditions is crucial for both buyers and sellers. By partnering with experienced agents and understanding the data, you can make informed decisions for your future.
The Austin real estate market has shown impressive durability even as mortgage rates rise. Though there was a slight 0.6% increase in closed listings compared to last year, the market's stability since July 2022 is a positive sign. As things even out, potential buyers might expect a more stable environment, offering a good opportunity for those who've been unsure about buying. This blog takes a closer look at the current trends and gives a glimpse into Austin's housing future.
Let's start by looking at the important points from July 2023:
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The number of homes for sale increased by 12% compared to the previous year, giving more options for people looking to buy a home.
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The average days a home stays on the market decreased by 2 days from the previous month, now at 59 days, but it’s 22 days longer than a year ago.
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The number of new listings entering the market dropped by 23% compared to the previous year, and dipped 16% from last month, potentially signaling fewer new weekly listings for fall home buyers.
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Even though 14% more homes went under contract compared to last year, demand from buyers cooled by 7% compared to last month, which may indicate the market is slowing down.
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Home sales went up slightly, less than 1%, compared to the previous year, but sales decreased 10% from the previous month.
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The number of available homes in July stayed around the same as the previous month, at 3.7 months, compared to a 2.7 month supply a year ago.
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The median home sale price decreased by 10% compared to the previous year, now at $462K. This is a 4% decrease from the previous month, which could give buyers more room to make a purchase.
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Homes sold closer to their list price at 94%, compared to 90% in January. This shows sellers might have more power in negotiations.
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Right now, there are over 11,000 homes are for sale, and more than 5,000 homes have lowered their price in the last month.
Source: Austin Board of REALTORS®, Austin-Round Rock Metropolitan Statistical Area.
The Interplay Between Inflation & Interest Rates
The connection between inflation and interest rates remains a key focus of market talks. The idea of a "soft landing" by the Federal Reserve gains attention as traders study the changing economic situation. With conflicting signals, people thinking of buying homes are recommended to think through their choices and look into different mortgage strategies. Even though things seem steady right now, the uncertainty about what the Federal Reserve will do and the mixed signals make it hard to predict how rates will change.
Mortgage Rates and the Road Ahead
After climbing for five consecutive weeks, the 30-year fixed-rate average hit 7.23% during the week of August 25th, as reported by the recent Freddie Mac survey. This was an increase from the previous week's rate of 7.09%. These mortgage rates are now at their highest point since 2001, and they're expected to stay high due to a combination of economic factors. The re-emergence of inflation pressures has led to predictions of a rate increase in September, reflecting a broader economic strength that's pushing up the 10-year treasury yield. When treasury yields go up, so do mortgage rates. This pattern is anticipated to continue for around six to nine months.
John Coake, Head of Sales at Realty Austin, noted, "Homebuyers are adapting to the new normal of mortgage rates. Waiting for rates to decrease could result in missing out on home value growth and facing more buyer competition in the housing market."
Pro Tip: If you’re a potential first-time home buyer, explore our guides on qualifying for a home loan, essential questions to ask, overcoming down payment myths, and affordability resources to get started.
The Promise of Opportunity in Texas
"Texas remains a land of promise. It's become a hub for businesses, generating job openings for many. As a result, we're witnessing more families and investors coming to our region," commented Amanda Dudley, North Agent Success Manager at Realty Austin. The vibrant business environment in Austin is clear from its significant number of new business applications in 2022, earning the city the 21st spot nationally. Amidst this hopeful economic climate, Austin's population growth stands out, as it's among the four Texan cities within the top 15 nationally for growth between 2021 and 2022.
From Summer to Autumn, the Fall Forecast
With new listings decreasing by 23% compared to the previous year and a 16% drop from the previous month, the market might cool down even faster as we move into the autumn months. Furthermore, the median home sale prices have gone down by 4% from the previous month, now standing at $462K.
These factors indicate a potential slowdown in market activity for September and October, which could lead to more sellers taking a step back. However, there's a positive aspect too—homeowners with significant equity are at an impressive four-year peak. Especially in Austin, residents have witnessed a remarkable 42% increase in their equity since July 2019.
"If you're a homeowner considering a move, it's a good idea to reach out to a local professional for a free market analysis. You might be pleasantly surprised at the extent of your home equity," advised Tom Thornton, Southwest Agent Success Manager at Realty Austin. Discover how a Realty Austin agent markets your home for sale.
The Impact of Getting Your Home's Price Right
According to data on price reductions for July provided by the Austin Board of REALTORS®, almost 90% of homes that were sold in Austin needed their prices adjusted within just a month. This highlights how crucial it is to set the right price for a property that truly reflects its value.
"Homes that are priced accurately generally sell 2.7 times faster compared to those that need a price modification. When we look at different price ranges, a clear pattern emerges: homes that require price adjustments often take more time to sell. By studying local data and trends, both buyers and sellers can make smarter choices to ensure smoother and more successful transactions," shared Jennifer Korba, Central Agent Success Manager at Realty Austin.
Whether you're buying or selling, having a good grasp of the latest trends and market conditions empowers you to make well-informed choices. Begin your real estate journey and achieve your goals with the assistance of a local professional. You can get in touch by calling 512-241-1300 or emailing realtor@realtyaustin.com.
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