The cooler temperatures are coming to Austin this season, and the Austin housing market is cooling too! We all know that the past year has been an intense, competitive seller’s market, but it’s changing. Instead, it’s now a more manageable real estate market. Here are the things you can expect this winter:
1. Slower home price appreciation
This past summer had the highest median sales price in the Austin-Round Rock MSA of over $460,000. September signaled the start of a slow down with a median sales price of $450,000. While it’s a 28.5% increase year over year, it’s also a $20,000 decrease from August.
CoreLogic predicts that annual price growth should slow to 2% by next September. Big mortgage purchasers like Freddie Mac and Mortgage Bankers Association expect total 2022 price increases in the 5% to 7% range. A healthy, balanced market will have an appreciation of about 3% each year.
2. More affordable listings
One study found that by analyzing market data through the end of September 2021, they found the 50 largest metro areas and the percentage of property listings that involve a price reduction. This means sellers are working harder to attract more buyers as the slow season begins. The Austin-Round Rock area made No. 4 in the top 5 markets with the highest “price reduced share” for September 2021 at almost 25%. Austin also stuck out because it had the most significant increase in new property listing during September. Prices are decreasing, and listings are increasing!
August inventory reached 1.0 months, making it the highest level of inventory since October 2020. Austin Board of REALTORS® president Susan Horton, said “The Austin housing market remains strong and competitive. However, more homes are beginning to hit the market evidenced by the increase in new listings in September, which is creating a greater number of opportunities for buyers.”
3. Fewer bidding wars
With more inventory on the market with more reasonable pricing, there will be less competition amongst buyers this winter. Less competition typically means fewer bidding wars. September witnessed an increase of almost 300 active listings compared to August’s numbers this year.
One factor that indicates this is true: mortgage application numbers. The number of mortgage applications dropped to its lowest point since January 2020. In addition, pending sales in the Austin-Round Rock MSA fell by a little over 1% to 3,552 in September. It’s also a decrease when compared to August’s pending sales of 3,970. ABOR president said, “August’s housing activity is closer to what we would typically experience in the fall.”
4. Homes on the market for longer
Along with the changes in prices, pending sales, and active listings, the number of days a home spends on the market is also evolving. When buyers aren’t forced to compete with one another, it’s likely that available homes will be on the market longer. In August, homes were on the market for an average of 14 days. In September, that number extended to 17 days.
While these are all positive signs for homebuyers, it’s still a seller’s market in Austin. If you’re ready to buy this winter, let’s create a timeline for you to reach your home buying goal. Contact Prism Realty today!