September 2022 Housing Market Update for Austin, TX MSA

[Bryan Noth]

September 2022 Housing Market Update for Austin, TX MSA

September 2022 statistics have been released for the Central Texas Housing market. There was a slight decrease in median sales price from the preceding month and a 5% increase from the preceding year for the entire Austin Metropolitan Statistical Area.

The City of Austin saw no change in month to month median home price from $555,000 and a 5% increase from the previous year. The Austin-Round Rock MSA saw a change in median home price from $496,039 to $470,000 a month to month decrease of $26,039 and an 5% increase from the previous year.

The following infographics and data is courtesy of the Austin Board of Realtors:

Housing inventory saw for the MSA saw a slight increase month to month inventory from 2.9 months in August to 3.1 months for September, and a 2.1 months increase over the preceding year. The City of Austin saw a slight increase month to month inventory from 2.4 months in August to 2.7 months for September, and a 1.6 months increase over the preceding year.

I wrote last month about withdrawn and expired listings. In that snapshot 3,190 homes had been withdrawn or expired in the past 90 days. Fast forward 30 days since that writing and another 1,506 have been withdrawn or expired. The pace of withdrawn listings has accelerated yet again at nearly 150% the previously 3 months.

Statistically the Austin MSA remains a seller’s market from an inventory perspective. However, buyers have not had this much negotiation power for many years. Negotiations, concessions, and under asking offers are becoming more common as homes sit on average for 40 days on the market.

Looking ahead, the Fed has nearly promised that additional rate hikes are coming. Recent inflation and unemployment reports only supported that directive. In a broad perspective, interest rates hikes have forcibly normalized the housing market for Austin with respect to inventory and prices. Home prices are now 5% above where they were one year ago. I would highly encourage investors to look at rent to purchase price ratios and get back to basics with running calculations. With rates forcing some and scaring others away from purchases, the competition is low. Prices are down but rents have remained strong and will likely remain so as more buyers are forced to rent, only creating additional rental demand. Rent by the room models, month to month or medium term rentals, short term rentals, and even traditional long term rentals are seeing cash flow. And if rates do subside in the next 1-2 years a refinance could dramatically accelerate cash flow returns.  

Disclaimer: The information provided here is for educational purposes only, past performance is never a guarantee of future performance.