Austin Real Estate Market: Statistics and Trends for 2023

Texas – The real estate market in Austin is in transition. While the Austin housing market is still a seller’s market, the trend is changing. More potential buyers are renting now, thanks to the slowdown in the market. Next year, the market will shift from a seller’s market to a buyer’s market.

The Austin housing market pushed more potential buyers to rent during the COVID-19 pandemic

Prior to the COVID-19 pandemic, the housing market in Austin was tight, with rents rising about 5% annually. In Austin alone, there are approximately 125 people commuting each day. In addition, builders have not kept pace with demand, and city zoning ordinances limit the construction of new multi-family dwellings. As a result, housing prices have reached their new peak. In May alone, the median sale price in Austin and surrounding Travis County was $676,000, while the median rent was $2,700.

While the housing market remains unbalanced and favors sellers, the increased bargaining power of the buyer has made buyers more knowledgeable. In June, homes sold for nearly 100% of their listing price. However, residential home sales fell 20.3% year over year, despite median home prices rising 13%. In June, the number of new listings rose nearly 19% to 6,160, and Austin’s housing stock rose to 2.1 months.
The seller’s market unilaterally pushed more potential buyers to rent in Austin, even as home values ​​increased. This demand for rentals is likely to continue for the foreseeable future, and opportunistic Austin property investors should focus on long-term rental property acquisitions. This would offset higher purchase costs and provide years of positive cash flow.

Austin housing market cools down

Although the Austin housing market is not in a balanced state yet, it is starting to cool down. While demand is still high and prices are still rising, the slowing rate of growth in sales and inventory is a positive sign. With fewer homes for sale, buyers now have more bargaining power. In June, homes sold at an average of 100% of the list price. Moreover, new listings increased 19.6% to 6,160, and the housing stock reached two months.
Several factors contribute to the slowdown in the housing market in Austin. First, higher interest rates are likely to affect buyers’ decisions. The Austin housing market is still considered a seller’s market, but the increasing costs of home financing are preventing many from buying.

Second, mortgage rates have continued to rise in recent weeks. According to Freddie Mac, the 30-year fixed-rate mortgage rose 2% from January to May 2022. Of course, rising inflation and fear of a recession are contributing to increased economic uncertainty. Combined with a declining housing supply, these factors could lead to a cooling of the Austin housing market by 2022.

The Austin housing market is a seller’s market

Although the Austin housing market is still a seller’s market, buyers have increased bargaining power. Last month, homes sold for more than one hundred percent of list price. This has forced Austin REALTORS to lower list prices, which will likely push the selling price down. New listings increased 19.6% to 6,160, pushing Austin’s housing stock more than two months old.
While Austin is home to many tech companies, there are signs of a technology downturn looming. Inventories are up nearly eighty percent in the past year, the largest increase of any metro in the United States. During the same period, the Austin housing market experienced the largest year-over-year increase. Austin Sacramento and Phoenix followed, with each market seeing a five hundred percent increase in inventory.
In April 2022, CoreLogic released a report showing that Austin is one of the 10 largest real estate markets with the largest increase in single-family rentals. This is due to the burgeoning local technology industry, the shift to remote work, and the relative affordability. According to a CoreLogic report, home prices in Austin increased by 19 percent from May 2021 to May 2022. Also, properties near the University of Texas Austin will command high rents, as there are nearly 40,000 students at the University of Austin alone. Other notable universities in the city include St. Edward’s University, Heston Tillotson University, and the National American University.

The Austin housing market is changing

The Austin housing market is becoming more competitive, and traditional home ownership is becoming less popular. Instead, homebuyers choose apartments and townhouses. The city has been one of the most dynamic real estate markets in the United States for several years now. The median home price is already up 20% year over year, reaching its highest level in April at $550,000.
Real estate experts anticipate that the Austin housing market will witness a major transformation next year. This shift will reverse a trend that already exists in other major cities. In Austin, home prices are rising 5-6% faster than the usual rate. However, home sales are down compared to the same period in 2021.
A recent study by the Texas Association of Realtors in Austin showed that the median home price in the city is $365,500—a 19% increase from the previous year. As a result, affordability will become an issue in the city. A 2,500-square-foot home in downtown Austin is listed for $1.5 million. As a result, the Austin housing market is expected to transform by 2023.

%d bloggers like this: