Austin Market Report - February 2023

[David Ivy]

The February 2023 market numbers are out from the Austin Board of Realtors (ABoR). Last month, the median home in Austin sold for $530,000, which is down 6% YOY. However, the greater metro had a more considerable YOY decline of 12% to a median price of $436,491. Here are additional stats for Austin and the greater metro:

Mortgage rates in the 6-7%+ range, inflationary pressure, a cooling tech sector, and an overall uncertain macroeconomic future in the US has pushed many would-be buyers to the sidelines and increased housing inventory in the Austin metro.

Here’s an interest rate chart for a 30 year fixed mortgage over the past 5 years:

Below is a chart showing the interest rate on a 30 year fixed mortgage (orange) alongside the volume of new mortgage applications (blue) that lenders are receiving. This is a proxy for buyer demand. As you can see, new mortgage applications are the lowest they have been in at least 10+ years:

The chart below showing the median sales price of a single-family home in Austin shows that prices peaked in May 2022 at around $730,000. Since then, the median price has fallen roughly 22%.

Current single-family prices in Austin are similar to those seen in early 2021.

Overall, though, the Austin metro market still has robust buyer demand and constrained housing inventory, which currently sits still well within “seller’s market” territory at around 2.2 months. This is because, despite recent layoffs in the tech sector and the broader economic factors mentioned above, the fundamental "boom town" story of the Austin economy so far remains largely unchanged.

According to the Austin Chamber of Commerce, “Austin added 71,000 jobs, growth of 5.8%, in the 12 months ending in January, making it the third best performing among the top 50 metros.”

The Austin economy made up all of 2020’s pandemic-related job losses by April 2021. The Austin metro stands atop all other metros for growth since February 2020.

Moreover, unemployment in the Austin metro remains extremely low and outperformed all other major Texas metros:

For some context–and maybe to kick off some discussion– I’d like to end with this quote by Ashley Jackson, the current ABoR president: “Remember, a healthy housing market isn’t defined by breaking records every month, but by market activity that’s steady-paced and sustainable.”