Austin Home Price Drop Coming...Again

by Jeremy Knight

The Austin housing market is headed for trouble. I want to discuss some things that are happening in the new construction world because this is going to directly affect the Austin housing market and our interest rates. Maybe new construction is not the way to go?

Potentially, maybe you should be making offers on resales and putting money towards upgrading. I'm going to dive into the numbers and statistics of where we currently are with price, inventory, and upcoming predictions.

Overall Market Trends:

Austin housing market is facing potential challenges.
Builder confidence has risen from 50% to 55%.
New construction makes up 33% of Austin's housing market.
Mortgage interest rate is around 6.9%.
There's speculation about potential interest rate changes by the Federal Reserve (FED).

New Construction and Market Impact:

Builders are finding more confidence.
Proposed program to incentivize multi-family building on single-family zoned land.
Concerns about potential impact on single-family home prices and affordability.

Rental Rates:

Rental rates for studios and two-bedroom apartments are down 7% year over year.
One-bedroom apartment rental rates are up 5% year over year.

Inventory and Buying Strategies:

Around 9,500 homes are on the market in the MLS, with 58% of them being vacant.
Buyers should consider homes needing some work for potential better deals.
Sellers should be mindful of buyer preferences for move-in-ready homes.

Recent Month's Data:

Austin's reported numbers show a month-over-month price decrease, but Jeremy disagrees with the reported data and suggests it should have been an increase.
Jeremy predicts that Austin's year-over-year prices might not achieve a positive change by year-end.

Market Advice:

Both buyers and sellers should be prepared for a challenging Austin housing market. Buyers are advised to get ready for competitive times ahead, especially in the upcoming months of July, August, September, and October. Sellers are encouraged to approach pricing strategically and be cautious about potential drops in prices. It's important to understand the complexity of percentage drops in prices, so it's strongly urged to be discerning when interpreting market trends and statistics.