Austin Real Estate Market Update - September 2022

[David Ivy]

The September 2022 report from the Austin Board of Realtors shows the Austin metro market continuing to normalize in response to high inflation, mortgage rates approaching 7%, and a possible recession in the US. Here are some important notes:

• The median home price in Austin was up 5% over September 2021 at $555,000. The median home in the greater metro sold for around $470,000 last month, which is up 5% year over year. Appreciation has slowed significantly in recent months. However, median home prices have yet to show a year-over-year decrease and are, indeed, still rising in Austin and the greater metro.
• Austin’s housing inventory was at 2.7 months, which was 1.6 months higher compared to this time last year. Metro inventory was at 3.1 months, which is similar to last month. So, we’re still very much in a seller’s market with inventory that could be finding its equilibrium. Time will tell.
• Closed and pending sales were all down big. New listings were down slightly, while the number of active listings was up substantially compared to this time last year. In fact, there were 162% more homes on the market in the Austin metro for buyers to choose from last month compared to September 2021.

Cord Shifflet, ABoR president, summed it up: “Homebuyers have not had this much leverage and this many options in over a decade. We’re still in a seller’s market, but as homes take longer to sell and are being bought for less than the original list price on average, and with inventory steadily increasing, right now is a great time to be a homebuyer in Central Texas.”

Here are the numbers for the City of Austin and the greater metro area:

If you’re a seller, you have to respect the available comparables, even those 3+ months old, and strongly consider other competing listings in the area when pricing your property. An asking price is no longer a jumping off point for a bidding war in the Austin metro. Buyers have much more selection and can now be more picky about a property’s condition. Sellers often have less negotiating leverage compared to previous years. Preparing a home well, staging when appropriate, and having strong marketing is crucial to help your listing stand out among the competition.

If you’re a buyer, you have many more properties to choose from and significantly fewer buyers competing for them. You have much more negotiating leverage. In many instances, you’ll find that you’re the only buyer making an offer on a property at a particular time. Unless something unexpected happens, the current market numbers and overall economic health of Austin suggests that prices are unlikely to fall significantly from their current levels. In fact, prices may rise again in the spring and summer, now that the market appears to be returning to its normal seasonal behavior.