Austin Market Report - September 2024

[David Ivy]

The September 2024 report from the Austin Board of REALTORS® (ABoR) shows housing prices in Austin and the greater metro remained fairly stable over the past 12 months. During that time, the median sales price of a home in the City of Austin rose slightly by 1.7% to $585,000, while the greater metro dropped 6.6% to a median price of $425,000. Inventory has held steady around 5-6 months for some time now, with roughly 11% more active listings on the market last month compared to September 2023. However, the report shows Austin now approaching 7 months of inventory, which is flirting more seriously with “buyer’s market” territory. It is notable, though, that pending sales (i.e., homes under contract) were up around 20% in the greater metro last month compared to the same period last year. Pending sales in Austin itself were up nearly 10%. This is a sign that buyer demand for Austin area housing, though lower than previous years, is still very healthy.

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

Here’s a chart showing the monthly median sales price of a single-family home in the City of Austin in 2024:

The median sales price for a single-family home in September 2024 was up roughly 11% from the beginning of the year. However, we can see that the increase in listing inventory may have caused prices to soften as the summer progressed. Compared to the recent pricing peak in May 2022, single-family home prices in Austin are down approximately 15%.

For some broader context, here’s a chart of the median sales price of a single-family home in Austin over the past 10 years:

As you can see, prices in Austin are still substantially above pre-pandemic levels. In fact, the median sales price of a single-family home in the Austin metro is ~52% higher than it was at the start of 2020. For the 10 year period spanning September 2014-2024, single-family prices in Austin nearly doubled, yielding an annualized appreciation rate of ~9.8% in that period.

With inflation nearing its 2% target and signs of a slowing labor market, the Federal Reserve last month made its first cut in to the federal funds rate since the start of the COVID pandemic. Anticipation of these cuts initially moved mortgage rates downwards to their lowest in nearly 20 months. However, rates have since moved upward abit. A 30-year fixed rate mortgage is currently sits around 6.6% interest:

All else being equal, lower mortgage rates reduce the cost of ownership and, thereby, allow more people to afford to buy. For example, a buyer putting 20% down on a $500k home would pay around $500k in interest over the life of a typical mortgage at current rate around 6.5%. With an 8% mortgage rate, they would pay more than $650k in interest. However, as this WSJ article points out, falling interest rates won’t solve all the problems faced by many buyers in current market conditions.

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. Listings are selling for roughly 92% of their list price on average. Multiple offers are now the rare 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 roadblock, then I recommend negotiating a rate buydown at a seller’s expense or looking at new construction, where builders are offering rate reductions and other substantial incentives.

What if I’m a seller? 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 competitively and be prepared for buyers to request concessions. Days on market are approaching870 days on average, depending on the area. Many listings are adjusting their asking price at least once while on the market. But properties priced and marketed 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.” With the increased competition among sellers, it’s crucial to prepare a listing to stand out among the rest and work to address buyer objections prior to going on market.