Homeowners Can't Leave Their Homes! Crushing The Housing Market

The Austin housing market is seeing its highest inventory levels in years. But what’s driving homeowners to sell, and where are they going? As your trusted Austin realtor, I explored an insightful article from the Austin Business Journal discussing the "lock-in effect" and its impact on the market.

Current Homeowner Statistics:

• 90% of homeowners have interest rates below 6%.
• 82% of homeowners enjoy rates below 5%.
• 62% are below 4%.
• 23% have rates under 3%.
• 42% own their homes outright.

These low rates mean many homeowners feel “locked in” and reluctant to sell despite rising market interest rates, currently around 7.16%.

Key Reasons for Selling:

1. Politics and Climate: While politics is a factor, it's a minor one. The city’s growth and changing dynamics influence some decisions.
2. Senior Relocations: Seniors are selling to move in with family or for assisted living, driven by the need for more support.
3. Divorce: A significant number of homes are listed due to divorce, impacting inventory levels.
4. Property Taxes: High property taxes are a common complaint, causing many to reconsider their living situations.
5. Airbnb Market Changes: The drop in Airbnb demand has led many investors to sell properties that are no longer profitable.

Market Trends:

• High Home Prices: Austin's median home prices are well above the national average, pushing some to sell.
• Suburban Shift: While Austin city proper saw a net negative migration, suburbs like Dripping Springs experienced growth.

Predictions and Advice:

• Interest Rates: Speculations suggest rates could rise to 9.7%. If true, this might further lock in current homeowners.
• Inventory Peaks in October: Expect more homes to hit the market in October, a trend consistent with previous years. This could be a strategic time for buyers to find deals.

As we navigate these market dynamics, it’s crucial to stay informed. Whether you're buying or selling, understanding these trends can help you make better decisions.