All Forum Posts by: David Ivy

The January 2025 report from the Austin Board of REALTORS® (ABoR) shows stable housing prices and balanced market conditions in the Austin metro as we start the new year. Here are some key highlights from the report, which compares January 2025 with January 2024:

• The median sales price for the greater Austin metro fell 4.7% to $409,765, while the City of Austin saw a 4.7% increase to $553,465.
• Total sales in the metro rose 1.1%, whereas the city saw a 4% decrease in closed sales, demonstrating continued demand in spite of economic challenges.
• Pending sales under contract dropped 7.5% in the metro and 1.4% in the City of Austin, suggesting a slight decrease in demand at the start of 2025.
• Listing inventory increased 16.5% in the metro and 15.5% in the City of Austin, resulting in 5.6 months of available housing inventory in the metro and 6.2 months in the city, approximately one month more than in January 2024.
• According to the Texas A&M Real Estate Center, a balanced real estate market has around 6.5 months of inventory. The Austin area had 5-6 months of inventory for most of 2024.

Here are the January 2025 numbers for Austin and the greater metro:

Here’s a chart showing the median sales price of a single-family home in the City of Austin in over the past year:

The median sales price for a single-family home in January 2025 showed a year-over-year increase of approximately 1.9% in Austin. So, the housing market in early 2025 is mirroring the price point seen at the beginning of 2024.

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:

Compared to the recent price peak in June 2022, the median single-family home price in Austin is down approximately 12%. However, pricing in Austin is still substantially above pre-pandemic levels. In fact, the median sales price of a single-family home in the Austin metro is about 39% higher than it was at the start of 2020. For the 10 year period spanning

January 2015-2025, single-family prices in Austin rose 78%.

I’m happy to report that I’m now sharing leasing stats in my monthly updates. Here are the numbers for the City of Austin and the greater Austin metro area:

A 30-year fixed rate mortgage is still sitting around 7% interest:

For some broader context, here’s a chart for 30-year fixed mortgage rates over the past 5 years:

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 situations are 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? There is still strong demand for Austin area housing. Prices are still considerably higher than just five years ago. However, it’s important to price competitively and be prepared for buyers to request concessions. Days on market are averaging around 80 days, 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. Now is not the time to “test the market” with an ambitious price to “see what happens.” With the increased competition, it’s crucial to prepare your property to stand out and work to address obvious buyer objections prior to going on market.

Happy New Year! The December 2024 report from the Austin Board of REALTORS® (ABoR) shows stable housing prices and balanced market conditions in the Austin metro as we reached year’s end. Here are some key highlights from the report, which compares December 2024 to December 2023:

• *The median sales price in the greater Austin metro rose slightly by 1.4% to $450,000. In the City of Austin, we saw a 6.5% increase to $575,000
• *Total sales increased 2.5% in the metro. In the city, closed sales were up 12.6%. This reflects continued demand despite economic headwinds
• *Pending sales increased 3.1% in the metro and decreased 2.2% in Austin proper.
• *There was 10.1% more listing inventory in the metro and a whopping 30.5% more active listings on the market in the City of Austin. This worked out to just under 4 months of available listing inventory in both the greater metro and the city itself. According to the Texas A&M Real Estate Center, we find a balanced real estate market at around 6.5 months of inventory. For most of 2024, we saw 5-6 months of inventory in the Austin area.

Here are the December 2024 for Austin and the greater metro:

Here’s a chart showing the 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 December 2024 was up roughly 9% from the beginning of the year. As listing inventory built up in the spring, prices softened a bit as we hit the summer months with an uptick toward the end of the year.

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

Compared to the recent price peak in May 2022, the median single-family home price in Austin is down approximately 17%. However, pricing in Austin is still substantially above pre-pandemic levels. In fact, the median sales price of a single-family home in the Austin metro is about 48% higher than it was at the start of 2020. For the 10 year period spanning December 2014-2024, single-family prices in Austin nearly doubled, yielding an annualized appreciation rate of ~9.4% in that period.

With inflation close to its 2% target and an uptick in the labor market, The Federal Reserve may be taking a break from rate cuts. The Fed’s cuts in 2024 initially moved mortgage rates downwards to their lowest level in nearly 20 months. However, rates have since moved upward.

A 30-year fixed rate mortgage is once again sitting around 7% interest:

For broader context, here’s a chart for 30-year fixed mortgage rates over the past 5 years:

The real estate industry hoped 2024 would see a recovery in which mortgage rates fell and home sales climbed. However, as we look back, we see that this didn’t pan out. For those still wondering why mortgage interest hasn’t moved down alongside the Fed’s rate cuts, see this WSJ article: If the Fed Is Cutting Rates, Why Aren’t Mortgage Rates Falling?

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 30-year life of a typical mortgage at a rate around 6.5%. With an 8% mortgage rate, they would pay more than $650k in interest.

One major problem for both buyers and owners beyond mortgage rates is the rising cost of property tax and insurance. Here’s a chart showing what percentage of an American’s average mortgage payment goes to taxes and insurance:

Rising taxes and insurance premiums make real estate even less affordable for buyers already facing higher home prices and mortgage rates that rose ~150% in less than two years. Even if mortgage rates come down, rising property taxes and insurance show no sign of reversing. So, even if we see lower mortgage rates in 2025, falling rates won’t solve all the problems faced by 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 situations are 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? There is still strong demand for Austin area housing. 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 around 80 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. Now is not the time to “test the market” with an ambitious price to “see what happens.” With the increased competition, it’s crucial to prepare your property to stand out and work to address obvious buyer objections prior to going on market.

Happy Holidays! The November 2024 report from the Austin Board of REALTORS® shows stable housing prices in the Austin metro as we approach end of year. The median sales price in the City of Austin rose 2% from a year ago, coming in at $573,400. The median price in the greater Austin MSA increased 2.4% to $435,000 over the same period. Inventory has held steady at around 5-6 months for some time now, with roughly 4% more active listings on the market in the metro now compared to November last year. According to the Texas A&M Real Estate Center, we find a balanced real estate market at around 6.5 months of inventory. The Austin metro market is approaching that territory.

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

On the rental front, a recent Redfin report placed Austin atop the list for the largest year-over-year decline in median rents among US metros:

Appropriate rental pricing and high-quality marketing are vital to navigating the current leasing market effectively. The focus should be on eliminating vacancy and avoiding chasing unreasonable rental rates, especially in the slower winter months.

Here’s a chart showing the median sales price of a single-family home in the City of Austin this year through November:

The median sales price for a single-family home in November 2024 was up roughly 8% from the beginning of the year. As listing inventory began building up in the spring, we saw prices soften a bit as we hit the summer months.

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:

Compared to the recent price peak in May 2022, single-family home prices in Austin are down approximately 18%. However, pricing in Austin is still substantially above pre-pandemic levels. In fact, the median sales price of a single-family home in the Austin metro is about 47% higher than it was at the start of 2020. For the 10 year period spanning November 2014-2024, single-family prices in Austin nearly doubled, yielding an annualized appreciation rate of ~9% in that period.

With inflation nearing its 2% target and signs of a slowing labor market, The Federal Reserve recently made its third cut 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.

A 30-year fixed rate mortgage is once again sitting around 7% interest:

The real estate industry hoped 2024 would see a recovery in which mortgage rates fell and home sales climbed. However, as we sit here in mid-December, we see that this didn’t pan out. For those still wondering why mortgage interest hasn’t moved down alongside the Fed’s recent rate cuts, check out this WSJ article: If the Fed Is Cutting Rates, Why Aren’t Mortgage Rates Falling?

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, even if we see lower mortgage rates in 2025, 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? There is still strong demand for Austin housing with pending sales in the metro up 16% compared to last year (and up nearly 30% in Austin). 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 around 75 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. Now is not the time to “test the market” with an ambitious price to “see what happens.” With the increased competition, it’s also crucial to prepare your listing to stand out and work to address buyer objections prior to going on market.

The October 2024 report from the Austin Board of REALTORS® (ABoR) shows stable housing prices in the Austin metro over the past 12 months. The median sales price in the City of Austin only changed 0.5% from a year ago, coming in at $565,000. The median home price in the greater Austin MSA dipped by 3.2% to $430,000. Inventory has held steady around 5-6 months for some time now, with roughly 9% more active listings on the market in the metro now compared to Oct. 2023. According to the Texas A&M Real Estate Center, we find a balanced real estate market at around 6.5 months of inventory. The Austin metro market is approaching that territory.

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

Here’s a chart showing the median sales price of a single-family home in the City of Austin this year through October:

The median sales price for a single-family home in October 2024 was up roughly 5.5% from the beginning of the year. As listing inventory began building up in the spring, we saw prices soften a bit as the summer progressed. This appears to be continuing into the fall.

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:

Compared to the recent median price peak in May 2022, single-family home prices in Austin are down approximately 19%. However, pricing in Austin is still substantially above pre-pandemic levels. In fact, the median sales price of a single-family home in the Austin metro is ~44% higher than it was at the start of 2020. For the 10 year period spanning October 2014-2024, single-family prices in Austin nearly doubled, yielding an annualized appreciation rate of ~9% in that period.

With inflation nearing its 2% target and signs of a slowing labor market, The Federal Reserve recently made its second cut 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.

A 30-year fixed rate mortgage is once again sitting around 7% interest:

The real estate industry hoped 2024 would see a recovery in which mortgage rates fell and home sales climbed. However, as we sit here in mid-November, we see that this didn’t pan out. For those still wondering why mortgage rates haven't fallen alongside the Fed’s recent rate cuts, check out this WSJ article: If the Fed Is Cutting Rates, Why Aren’t Mortgage Rates Falling?

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, even if we see lower mortgage rates in 2025, 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? There is still strong demand for Austin housing, with pending sales up 22% compared to last year. 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 around 70 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. Now is not the time to “test the market” with an ambitious price to “see what happens.” With the increased competition, it’s also crucial to prepare your listing to stand out and work to address buyer objections prior to going on market.

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.

The August 2024 report from the Austin Board of REALTORS® shows housing prices in Austin and the greater metro have been fairly stable over the past 12 months. However, now that we’re heading into fall, we can see that 2024’s summer selling season was slower than 2023, with closed sales in Austin down around 16% compared to last year. Inventory has held around 5-6 months for most of 2024 so far, with roughly 15% more active listings on the market in the metro area compared to August 2023. So, while prices currently remain similar to last year, we are seeing softer buyer demand and increased inventory compared to 2023.

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

Here’s a chart showing the median sales price of a single-family home in the City of Austin this year through August:

The median sales price for a single-family home in August 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, pricing in Austin is 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 August 2014-2024, single-family prices in Austin nearly doubled, yielding an annualized appreciation rate of ~9.5%.

With inflation nearing its 2% target and signs of a slowing labor market, The Federal Reserve is predicted to cut rates as many as three times before the end of 2024 (see here). Anticipation of these cuts has already reduced mortgage rates to their lowest in nearly 20 months. A 30-year fixed rate mortgage is currently sits around 6.15% 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 93% 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. Mortgage rates might end 2024 below 6%. So, it could be a good time to start looking while inventory remains high.

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 around 70 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 likely buyer objections prior to going on market.

The July 2024 report from the Austin Board of REALTORS® (ABoR) shows housing prices in Austin and the greater metro have been stable over the past 12 months. However, it also shows that the summer 2024 market has been slower so far than last year’s. Closed and pending sales are down year-over-year. Inventory is in the 5-6 month range, with 20%+ more active listings on the market compared to July 2023. So, while prices held relatively firm overall, we are seeing a decrease in buyer demand and a buildup of inventory compared to this time last year.

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

Here’s a chart showing the median sales price of a single-family home in the City of Austin this year through July:

The median sales price for a single-family home in July 2024 was up roughly 12% 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 14%.

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, pricing in Austin is still substantially above pre-pandemic levels. In fact, the median sales price of a single-family home in the Austin metro is ~53% higher than it was at the start of 2020. For the 10-year period spanning July 2014-2024, single-family prices in Austin nearly doubled, yielding an annualized appreciation rate of ~9.6% in that period.

Recent data has given the Federal Reserve confidence that it has successfully tackled problematic inflation while avoiding a recession. A rate cut seems likely for September. This should have a downstream impact on mortgage interest rates. However, rates have already fallen recently to a 15-week low.

A 30-year fixed rate mortgage is sitting around 6.56% 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 the current ~6.5% rate. 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 94% of their list price on average. 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 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 robust 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 around 60 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.

The June 2024 market report from the Austin Board of REALTORS® (ABoR) shows that the median home price in the City of Austin decreased 1.6% to $600,000 over the past 12 months. The greater metro area’s median price fell 6.8% to $450,000. Housing inventory in Austin rose to 5.8 months, which is up by 1.9 months from June last year. Inventory in the greater metro rose to 5 months. Inventory is now very substantially above the extreme lows seen in recent years, when inventory in the Austin area fell below 1 month (very extreme imbalance between demand and supply) for a sustained period.

Kendall Garrison, CEO of Amplify Credit Union, recently said, “The good news is that we are moving toward a more sustainable level of inventory, which will provide price stability for sellers and more choices for buyers. The real test will come when the Fed begins to cut rates, as indicated for later this year, making it a challenging market for both parties.”

Clare Losey, ABoR’s housing economist, recently said, “From the buyer’s standpoint, there are a number of advantages and disadvantages…The biggest headwind to them are higher mortgage rates and the decline in purchasing power.”

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

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

The median sales price for a single-family home in June 2024 was up roughly 16% from the beginning of the year. Compared to the recent pricing peak in May 2022, single-family home prices in Austin are down approximately 11%.

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, pricing in Austin is still substantially above pre-pandemic levels. In fact, the median sales price of a single-family home in the Austin metro is nearly 60% higher than it was at the start of 2020. For the 10 year period spanning June 2014 through June 2024, single-family prices in Austin nearly doubled, yielding an annualized appreciation rate of ~9.3% in that period.

A 30-year fixed rate mortgage is sitting around 6.85% interest. That is the lowest we’ve seen in several months and well below the ~8% peak seen back in October 2023.

The Fed monetary policy and rate decisions remain the biggest single driver of the residential real estate market overall. The Fed recently adjusted its short term projection to one quarter point rate drop for 2024, though it had earlier predicted as many as three drops. So, we can still reasonably expect mortgage rates to drop this year, but probably not by much, and at a slower pace.

I also wanted to include a note for STR operators and investors in Austin. As you may know, in August 2023, a federal judge ruled that the City of Austin's short-term rental (STR) regulations were unconstitutional. These rules made it very challenging–-and frequently impossible–-for investors and others to operate non-owner occupied STR properties legally in Austin. The city, at the time, expressed disappointment at the ruling and began reviewing its options in response.

We now have some clarity on the city's response to the ruling, and it's overall good news for STR investors wishing to operate in accordance with local law. In this recently issued memorandum, Austin City Council requests that the City Manager modify the city’s STR regulations as needed to bring them into compliance with the ruling.

Going forward, there should be essentially no substantial difference in treatment between owner-occupants and investors/non-owner occupants when it comes to Austin's STR regulations. Investors should be able to apply for and receive STR permits under the same rules as owner-occupied properties. So, the stigma that Austin doesn't allow STR investment properties, outside of special circumstances, now seems inaccurate.

To be clear, this doesn't mean that there are no rules or regulations. For example, the city can still require a license to operate an STR, which comes with a number of requirements (e.g., sufficient insurance, application fees, certificate of occupancy, etc.). The city can also still require operators to collect tax similar to a hotel. Moreover, it seems that condo associations and neighborhood HOAs may still impose their own STR rules.

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 95% of their list price on average. 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 roadblock, then I recommend seeking opportunities to negotiate 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 robust 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 around 55-65 days on average, depending on the area. Many listings are adjusting their asking price at least once while on the market. But 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.” 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.

The May 2024 market report from the Austin Board of REALTORS® (ABoR) shows that the median home price in the City of Austin rose 11.6% to $608,438 over the past 12 months. The greater metro area’s median price was flat over the same period with a ~1% change to $459,450. Housing inventory in Austin rose to 6.2 months, which is up by 2.7 months from May last year. Inventory in the greater metro rose to 4.9 months. Inventory is now very substantially above the extreme lows seen in recent years, when inventory in the Austin area fell below 1 month (very extreme imbalance between demand and supply) for a sustained period.

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

Here’s a chart showing the median sales price of a single family home in the City of Austin over the past two years:

The median price for a single-family home in May 2024 was down roughly 10% from May 2022, which was the most recent pricing peak in the Austin market.

For some 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, pricing Austin is still substantially above pre-pandemic levels. In fact, the median sales price of a single-family home in Austin is about 50% higher than it was in May 2020. For the 10 year period spanning May 2014 through May 2024, single-family prices in Austin nearly doubled, yielding an annualized appreciation rate of ~9.2% in that period.

A 30-year fixed rate mortgage is sitting around 7% interest, which is down a bit from recent months, but still well above where we began 2024:

The Fed monetary policy and rate decisions remain the biggest single driver of the residential real estate market overall. The Fed recently adjusted its short term projection to one quarter point rate drop for 2024, though it had earlier predicted as many as three drops. So, we can still reasonably expect mortgage rates to drop this year, but probably not by much, and at a slower pace.

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 95% of their list price on average. 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 roadblock, then I recommend seeking opportunities to negotiate 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 robust 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 around 57 days on average, and many listings are adjusting their asking price at least once while on the market. But 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.” 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.

@Vishnu Balraj

In the City of Austin, the median rent for a one-story single-family home year-to-date has been $2,395/mo. The median days on market was 29 days. This is just for properties leased through the Austin MLS. However, the sample size is 1,665 leases year-to-date.

In the City of Austin, the median rent for a two-story single-family home year-to-date has been $2,800/mo. The median days on market was 38 days. This is still just for properties leased through the Austin MLS. However, the sample size is 1,272 leases year-to-date.

So, though they may spend a bit longer on the rental market, the median rent for a two-story home in Austin is higher than that of a single-story home. However, this difference in rents doesn't factor in that two-story homes on average tend to be larger than one-story homes.

My data source isn't super precise showing rent-to-sqft ratios, only rounding to whole dollars. That's less granular that you might like. However, my data source does say that, in the City of Austin, the median rent-to-sqft ratio for one-story homes is higher than that of two-story homes.