Have most buyers left Austin Market? Are they gone for good?

Question

Has anyone in the Austin market noticed a complete pause in the market the last 2.5 weeks? Context: My wife and I listed our primary for sale mid-june. As objectively as possible, if we had listed it 4 weeks prior, we'd have had 30 showings and multiple offers. It is priced well under the most recently closed comparables in neighborhood.

We have only had a handful of showings and no offers 12 days into listing. Obvious that there has been a significant shift in this market, at least at this price point ($600K-$700K) but do you local folks think this market will bounce back? We are considering putting a renter in the home in hopes for a stronger market next spring...after every media hub stops printing the same one study about Austin being overvalued.

Looking for any anecdotal input here, am I crazy or has this shift hit Austin harder than anywhere? Do we just need to be more patient? Thanks for any input!

Bruce Woodruff · Answer

It's also about a general slowdown IMO. Nothing but talk of inflation, hyper-inflation, recession, etc.... all day every day. Now this may be true (or not) but it tends to put the brakes on a robust economy, Happens every time......

Ryan Kelly · Answer

@Nick Anderson the Austin market has gone from 2,000 Active homes for sale in February to nearly 8,000 homes now in peak summer, so the slow down is predictable. Interest rates have climbed from 3.25% to nearly 6.5% at their peak which will obviously slow down buyers by a ton. The buyers and influx of jobs are still here, but many buyers have either been priced out in the short term OR are simply sitting on their hands to assess where the market will go next. To put it in perspective. We had approx 8,700 homes for sale in the summer of 2019, which is still more than we have now. We are transitioning out of the crazy low-interest rate fueled pandemic housing market back to a very normal balanced market. This is a good thing, but it will feel like the ice age for the next several months until buyers and sellers adjust to the new reality. Does your list price reflect past LIST prices or SOLD prices from the peak? If you are using sold comps, you are listed too high.

Rick Pozos · Answer

Listen to yourself, 2.5 weeks and no offer?? The sky is falling!!!

Yes, we have had super duper crazy times. Now, maybe not so much. Have you noticed rates have gone from about 3% to about 5.5 or 6%?? That will drastically change the mortgage payment. Even if the actual loan is only 300k, the payment is going to be over $500 more now. This is going to take some buyers out of the market or cause some to look at 50k to 100k lower priced houses.

Things are going to get back to more normal times, not like the last couple of years. It will reasonably take 1 month to 3 or 4 months to get a house sold. That is the bottom line. You might even have to give some concessions to the buyer. It is not that there are no buyers or all the buyers have left. Higher rates have caused people to react more rationally. The last couple of years were not rational at all!!! I have been in the real estate arena for over 30 years, trust me, the last couple of years were CRAZY.

I lived in Austin for over a year way back in another life. It is sooooo beautiful. The rivers, lakes, hill views, gigantic open areas, WOW. Breathtaking. And the people are great. People are going to still love Austin and all of Texas. It is just a part of life that things change. Dont worry, your house will sell. Just be a little patient.

Eliott Elias · Answer

We've trained sellers to believe their homes will receive multiple offers sell all in a weekend for a few years now. I think a shift of mindset is crucial. It's still a sellers market

Carlos Gonzalez · Answer

@Nick Anderson interest rates man

Alex Talcott · Answer

I invested as an LP 2.5 years ago, asset still held, and I haven't had anything worthwhile (underwritten returns) passive come to my attention since.

Ryan Kelly · Answer

@Bruce Woodruff it can be a self-fulfilling prophecy sometimes, that's for sure.

Ryan Kelly · Answer

@Nick Anderson It's a tough call. It simply may take more time to sell now versus the past two years. Instead of 2 days, it may take 2 months. I wouldn't drastically drop your price but rather focus on improving the property if needed and having a Plan B. I do think demand has taken a drastic hit, but the question is for how long? The second half of the summer is traditionally slow because a lot of potential buyers tend to travel during this time. Higher interest rates will slow down this demand even more. It may take until the fall before we see what the new market looks like.

Nick Anderson · Answer

@Rick Pozos

Thanks for your input! I agree and understand that most markets 2.5 weeks is nothing. But in a market that has seen 90% of homes list on Thursday and contract that Sunday, for 3+ years, a change in this pace almost overnight is hard to adjust to!

Have most buyers left Austin Market? Are they gone for good?

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