October 2022 Housing Market Update for Austin, TX MSA

[Bryan Noth]

October 2022 Housing Market Update for Austin, TX MSA

October 2022 statistics have been released for the Central Texas Housing market. There was a slight increase in median sales price from the preceding month and a 4% increase from the preceding year for the entire Austin Metropolitan Statistical Area.

The City of Austin saw no change in month to month median sale price from $555,000, and a 3% increase from the previous year. The Austin-Round Rock MSA saw a change in median sale price from $470,000 to $474,990 a month to month increase of $4,990 and an 4% increase from the previous year.

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

Housing inventory for the MSA saw a slight increase month to month inventory from 3.1 months in September to 3.2 months for October, and a 2.2 months increase over the preceding year. The City of Austin saw a slight increase month to month inventory from 2.7 months in August to 2.8 months for September, and a 1.8 months increase over the preceding year.

I have been tracking the withdrawn and expired listings and have highlighted an acceleration with those data points. This metric was the highest we have seen in years for September with 1,506 withdrawn and October has surpassed that figure with 1,877 withdrawn or expired listings. That is 84% of the closed sales, which was 2,244 as reported by ABOR during that same timeframe.

The real estate market has a typical annual cycle approaching the winter months wherein housing activity tends to dwindle naturally each year. October saw a sharp decrease in new listings, down 13% for the MSA and 18% for the City of Austin. Combine this data with the increase of withdrawn sales and it may be more than a typical slow winter season and more akin with what market analysts have dubbed a seller’s strike.

The Federal Reserve holds tremendous sway over interest rates which in turn can affect home prices. The simple but not perfect math is that every 1% increase in interest rates translates to a 10% decrease in buying power. The Federal reserve may well keep on their path of raising interest rates but the laws of supply and demand hold true as well. As homes become less affordable there will be a natural counterbalance of increased renters if there is not equal sales volume. Especially in a growing market like Austin. Additional rate hikes will continue to put downward pressure on prices but watching trends this is the first month since April of this year where a continued decrease did not occur.

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

[Joe Scaparra]

, as always I appreciate your reporting.  I am a little surprised we saw no change month to month in median sales price.  I was expecting it to go lower.  I think it will over the next few months, but several factors might be contributing to this no change.  Homeowners who have owe nothing on their homes or those who have mortgage rates in the 3%'s or lower (which are most at the current time) are very reluctant to sell as they will probably incur higher cost even if they decide to downsize due to the rise in mortgage rates.  AND, all those boomers, myself included, who have their taxes frozen at 65 are reluctant to sell as well because swapping houses will most likely cause their tax bill to increase since they are currently enjoying somewhat locked in taxes year to year now.  

Both of these factors result in lower inventory which bodes well for keeping prices propped up.  On the other hand, with there trend of increasing interest rates and the beginning of major companies beginning to layoff employees is spooking would be buyers thus causing less demand and lower housing prices.  In the Austin MSA the feeling of economic prosperity is still higher than most other parts of the country and thus it may be understandable that the market is showing a stabilization (month to month median prices unchanged).  However, I think this is short lived and that the Feds will win out with increasing interest rates and you will see in the coming months the median house prices continue to drop.  Inflation is real and we will have to endure some major pain to bring it down and the housing market is a lagging market indicator as to how the economy is trending.   I say buckle down as the worst is still in front of us.  Cheers.