Austin Housing Market Report May 2024

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In May, the Austin-Round Rock-Georgetown area saw its highest housing inventory in 13 years, offering buyers more options and the ability to be more selective. However, higher mortgage rates have balanced the market, impacting buyers' purchasing power. Sellers are navigating a complex market where strategic pricing and understanding buyer behavior are more crucial than ever as home prices remain flat and housing inventory rises.

“While the rise in inventory typically suggests a buyer's market, sellers can still achieve favorable outcomes by adjusting strategies to align with current economic conditions," explained John Coake, Vice President of Sales at Realty Austin Compass. 

Let's take a closer look at the latest trends and what they mean for you:

• Home prices maintain — Median home prices decreased by 2% from last month and showed a less than 1% decrease compared to last year.
• Time on the market decreases — Homes are now on the market for an average of 57 days, down 11 days from last month and eight days from last year.
• New listings surge — The number of new homes hitting the market increased by 2% from last month and 16% compared to last year, providing buyers with more options in today’s market.
• Slight shift in buyer demand — Pending sales decreased by 2% compared to last year and 6% from last month.
• Home sales up MoM — Home sales decreased by 12% compared to last year; however, closed sales increased by 9% from last month.
• Housing supply and inventory — Housing supply stands at 4.9 months, up from 3.4 months last year.
• Current market snapshot — Over 12,000 homes are for sale, selling for 95% of their original listing price. 

Austin's Record-High Housing Inventory and Its Impact on the Market

The Austin housing market has reached a 13-year peak, with inventory levels climbing to 4.9 months, up from 3.4 months just last year. This surge in available homes signifies a shift towards a buyer's market, giving potential buyers a wider selection and more negotiating power. On the other hand, sellers may need to adjust their strategies to stand out in a more competitive landscape. 

"This increase in inventory is a welcome relief for buyers competing in a pricier market. Sellers should focus on pricing strategically and enhancing their property's appeal to attract buyers," explained Jennifer Korba, Agent Success Manager at Realty Austin Compass. “This balanced market offers unique opportunities and challenges for both sides of the transaction.”

Mortgage Rates Cool Down

As of June 24th, mortgage rates for a 30-year fixed home loan are 7.02%, down from 7.05% the previous month. The Federal Reserve made efforts to maintain stability, and mortgage rates are slowly decreasing. Fannie Mae predicts a gradual market improvement in the year ahead, with mortgage rates averaging 6.7% at the end of 2024. Despite this slight decrease, the market remains largely unchanged as we transition from spring to summer, with home prices and housing stock levels holding steady. 

"Home buyers are presented with an excellent chance to capitalize on stable home prices before the market changes," said Tom Thornton, Agent Success Manager at Realty Austin Compass. "A continued drop in mortgage rates could increase buyer demand, potentially driving up prices due to heightened competition. Additionally, we've seen a significant improvement in housing supply, providing buyers with a wider range of options." 

How to Secure the Best Mortgage Rate in Today's Market

With mortgage rates influenced by many factors, trying to time the market can be challenging. Instead, focus on what you can control: your credit score, the type of loan, and the loan term. Improving your credit score can secure a better rate, while choosing the right loan type and term can make a significant difference.

How Home Equity Can Help You Move Despite Higher Mortgage Rates

Many homeowners feel stuck because today’s mortgage rates are higher than their current ones. However, leveraging the equity in your home can help offset these costs. Equity, the difference between your home’s market value and your remaining mortgage, has likely grown significantly due to recent home price appreciation.

"Homeowners sitting on a substantial amount of equity can use it to make their next move more affordable," said Amanda Dudley, Agent Success Manager at Realty Austin Compass. "This equity can be a game-changer, allowing for larger down payments or even the possibility of an all-cash purchase."

Home Prices and Market Stability

In May, the Austin housing market saw a slight decrease in median sales prices, reflecting less than a 1% drop year over year. This minor change suggests a stabilizing market, where pricing strategy becomes crucial for sellers aiming for an effective sale.

"Sellers need to recognize the importance of adjusting their asking prices to align with current market conditions. Setting the right price helps achieve quicker sales and minimizes extensive negotiations," noted Jennifer Korba, Agent Success Manager at Realty Austin Compass. 

Why Your Home's Asking Price Matters

Your home's asking price can significantly impact your bottom line and how quickly it sells. Setting the price too high may deter potential buyers while pricing it too low can result in a potential profit loss. Relying on your real estate agent's expertise is crucial to striking the right balance.

"Properly pricing homes can prevent them from lingering on the market, which could lead to decreased interest and lower offers over time. It also helps avoid the accrual of unnecessary costs associated with prolonged listing periods," said Tom Thornton, Agent Success Manager at Realty Austin Compass. “In a market informed by discerning buyers, an accurate and compelling price is not just a number but a critical marketing strategy that can attract serious prospects.”

If You’re Buying This Summer

Late spring and summer are popular times for buying homes. These seasons usually see more buyers, increasing competition, and more sellers listing their homes. Working with a trusted real estate agent is critical during this busy time. They can help you stay updated on new listings, make strong offers, and understand the true value of homes.

If You’re Selling This Summer

This season presents opportunities because many buyers are eager to move before the new school year starts. With higher inventory levels, having an experienced agent is crucial to guide you through effective marketing and pricing strategies to achieve your goals. They can help navigate offer contingencies and negotiations, ensuring your home is well-presented and priced correctly for faster sales and higher offers.

Your Moves Inspire

At Realty Austin Compass, your moves inspire our agents to serve as invaluable guides throughout your real estate journey, alleviating complexities and always advocating for your best interests. They will navigate market trends, decode pricing dynamics, review contracts, and leverage negotiation skills to ensure you can make an informed decision and secure a favorable outcome. Connect with a local agent today to confidently navigate your next move.

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