Happy New Year! Can I still say that if January isn't over yet?!?
To say that 2023 was a rough one for real estate, might be an understatement... nationally, homes sales were the lowest in almost 30 years! High mortgage rates and prices made home buying prohibitively expensive for many people last year.
While Austin didn't see the lowest level in home sales in 30 years - due to extreme population growth over the years - we were not immune to the slow down. Existing home sales slid just over 9% in 2023 compared to the prior year and the average home price is down about 6.5%. However, the average sold price from the end of 2019 to 2023 is up 37%.
"Real estate pricing is generally a slow moving ship, so it could be considered alarming to see price swings like this. However, when we look at a longer term perspective, we see that prices are generally stable. The pandemic caused extreme buyer behavior, but it appears that has now been corrected. Population growth has always been the primary driver of Austin’s real estate market (people need a place to live). When comparing our Avg Sold Price with our population growth, it appears very healthy." - Eric Bramlett
Is the real estate market slow down over?
We think it is! Mortgage rates have come down significantly from the peak and the Fed seems to have signaled more cuts happening this year. That will increase affordability for many people and we expect to see more buyers in the market this Spring... on a side note, our Spring market actually starts in February!
Home Prices
While the average sold price has declined 6.5% in the past year, you can see on the graph below that prices took an uptick in December. If that trend continues as we expect heading into the Spring market, we could eventually see prices return to 2021 levels in the near future. We should see a modest increase in prices for 2024.
Number of Homes Sold
2023 was the slowest real estate market we have seen in the past 5 years, down 9.26% for the year. However, with improvements in mortgage rates, we expect home sales to be steady for this coming year.
Homes for Sale
The number of homes for sale hit a 5 year high earlier this year, but but tapered off at the end of year which is normal during the holiday season. Interestingly, despite a nearly 300% increase in inventory since Dec 2020, we only have a 3 months supply of homes for sale - meaning, if no more homes come on the market, and we continue to sell homes at the same pace, there will be no more homes for sale. In other words, when the next market shift happens, we could quickly see ourselves back in the days of bidding wars and fast moving prices - but that's a conversation for 2025.
So, what does all of this mean for you?
If you are a buyer: Mortgage rates have come down significantly compared to a few months ago which is bringing out buyers who were on the fence and as we enter the Spring market, we should continue to see an increase in buyer competition. Increased inventory gives buyers more choices and lessens the chances for multiple offers, but the best homes will go quickly and garner more interest.
If you are seller: You can still benefit from the appreciate we've seen these past few years. Just know that there are a lot of homes competing for the same few buyers which means the the homes that are selling are staged, in great condition and priced well.
Call me, if you or someone you know is looking to buy or sell real estate in the Austin area, I'd love to help!
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