Austin Market Report - November 2023

[David Ivy]

The November 2023 market report from the Austin Board of REALTORS® (ABoR) shows that home prices in the City of Austin remained stable over the past 12 months, rising 1% from a year ago to $518,000. The greater metro area, however, showed a more substantial 8% annual decrease to a median home price of $424,250. The market approached 4 months of listing inventory, well above the extreme lows seen in recent years. However, inventory has remained relatively stable on a monthly basis for some time now. Overall, with sales volume remaining stable and pending sales up 9% from a year ago, the greater Austin metro market still has healthy buyer demand for housing, despite mortgage rates recently reaching 20+ year highs.

Here are the full stats for Austin and the greater metro:

Note that mortgage interest rates have pulled back somewhat sharply from their 8%+ peak in October. As of today, Mortgage News Daily, has a 30-year fixed loan at 6.62%

Though the Federal Reserve doesn’t set mortgage rates directly, its monetary policy does have a substantial downstream impact. So, take note that the Fed has now signaled multiple potential rate cuts in 2024. According to a Freddie Mac economist, “Given inflation continues to decelerate and the Federal Reserve Board’s current expectations that they will lower the federal funds target rate next year, we likely will see a gradual thawing of the housing market in the new year.”

What if I’m a buyer? In many ways, this is the best market for buyers in Austin in years. There are more listings to choose from now than any other time in nearly a decade. Prices have fallen. Multiple offers are now the exception, not the norm. Buyers have significantly more negotiating power. They can take time with their search and be more selective about a property’s location and condition. So, if interest rates are a buyer’s primary reason for staying on the sideline, my recommendation is to focus on opportunities to negotiate a reduced interest rate from a seller or take a look at new construction, where builders are offering rate reductions and other substantial incentives.

What if I’m a seller? Sellers should know that there is still strong demand for Austin housing and that prices are still considerably higher than just a few years ago. However, it’s important to price for today’s market conditions. Days on market are up and the majority of listings are reducing prices at least once during the process. However, properties priced appropriately can still go under contract in a matter of days, sometimes with multiple offers. Now is not the time to “test the market” with an ambitious price to “see what happens.” Since there are many more listings competing on the market than in previous years, it’s crucial to prepare a listing to stand out among the rest and work to address buyer objections prior to going on market.