Where is the Austin Real Estate Market Now?

After over a year of an Extreme Seller’s Market (See Market Report Tab above) where there were fewer than 2,000 homes for sale and prices rose substantially, it all changed in May. There are now over 9,000 homes for sale, interests rates have risen 3.5 percent to just under 7%, inflation has increased the cost of goods and services and home values are leveling off or slightly declining.

What does the future hold for the Austin Real estate market?

According to economist and native Austinite, Mark Sprague, the State Director of Information Capital with Independence Title Company, the Austin real estate market remains one of the most robust in the country, primarily because of increasing job opportunities and people and companies moving to Austin.

According to Mark Sprague:

* Average interest rates will increase to 6.5 to 7.5% over the
next year, and stabilize at the 50 year average of of 7.4%
* The US will go into recession, following Europe and China, that
will last 3-5 years.
* Austin will continue to have consistent housing demand,
however Austin is critically short of homes on the market to
meet the demand and he predicts inventory will decrease 10 to
15% next year. Because Austin rents have gone up over 22%
in the last year, there will be an increase in demand for the
purchase of homes.
* Because the cost of materials have risen between 10 and 50%,
new homes will continue to cost more.
* Current homes values may decline slightly, however they will
increase in the Spring when our demand is traditionally higher.
Mark Sprague’s basic recommendation: Buy now as time will only
cost a buyer more. Austin is not slowing down.

For sellers, homes have to be presented extremely well and priced correctly. He said, “if your house does not sell in 30 days, you have missed getting the most value for your house and should lower the asking price.” Our experience tells us that you should price a house competitively and let the market set the sales price. If you have to reduce the price, buyers will generally ask for a further reduction. Price it to sell so that you avoid having to make reductions.

In this rapidly changing market, extensive experience in real estate is critical to evaluate the “the right price.” If you are a buyer in today’s market, you may pay a little more in interest rate but you likely won’t be competing with other buyers driving the price up. Interest is still the best tax deduction we have, and the loan can always be refinanced when the rate drops. If you are a seller, setting the right price the first time is key in getting top of the market pricing. We can help you figure out how to position the condition and price just right to make it an attractive buy.

As always, real estate is hyper local even by neighborhood. Let us know when it is time for you to make your next move.

Submitted by Laura Duggan, Broker, West Austin Properties, laura@westaustin.com, 512-750-2425.