Despite Price Decreases and Inventory Gains, Region Needs More Housing AUSTIN, TX — In January, median home prices dropped 6.3% to $450,000, the largest price drop since July 2011, according to the Austin Board of REALTORS® latest Central Texas Housing Report. Despite the price decrease, monthly housing inventory stayed flat at 2.7 months of inventory from December 2022, demonstrating that this market is still in need of more housing as the industry standard is that six months of available inventory is considered a balanced market between buyers and sellers. Additionally, residential home sales declined 27.3% year-over-year to 1,634 closed sales and sales dollar volume declined 29.1% to $917,954,115. New listings dropped 16% year-over-year to 2,988 listings while pending listings dropped 16.7% to 2,581 transactions. Monthly housing inventory increased 2.3 months to 2.7 months of inventory, and homes spent an average of 76 days on the market, up 47 days from January 2022, but only up three days from December 2022.
"January’s data demonstrates the Austin-Round Rock MSA market is continuing to find a post-pandemic normal.” Ashley Jackson, 2023 ABoR president, said. “As we compare the market today to what was an abnormal market in the previous three years, looking at the year-over-year numbers needs the added context of comparing trends month-to-month. Without this context, the year-over-year data may not be as informative as the market continues to adjust.” Jackson also noted that rising interest rates and affordable housing will be the major drivers challenging consumers this year and emphasized the importance of local experts. “Housing affordability woes combined with higher interest rates play an outsized role in market activity. There is no national real estate market. Consumers need to follow local Realtors® and local news while taking sensational headlines and reports with many grains of salt. Now more than ever, it is important for buyers and sellers alike to work with a Realtor® who best understands how to navigate the changing landscape of our real estate market.”
City of Austin In January, home sales decreased 37.3% to 439 sales, while sales dollar volume decreased 35.0% to $295,909,860. At the same time, median price slightly decreased 4.6% to $525,000 for the City of Austin. Last month, new listings ticked up 13.0% to 886 listings, active listings skyrocketed 387.5% to 1,760 listings as pending sales declined by 26.0% to 678 pending sales. Monthly housing inventory increased 1.9 months year over year to 2.2 months of inventory.
Travis County
In Travis County, home sales decreased 31.7% to 749 sales, while sales dollar volume decreased 31.3% to $492,893,906. Last month, the median price in Travis County slightly dipped 5.9% year over year to $499,274, while new listings increased 17.0% to 1,410 listings and active listings ballooned 421.9% to 3,116 listings year over year. Pending sales declined 22.3% to 1,130 pending sales as monthly housing inventory increased 2.0 months year over year to 2.4 months of inventory.
Williamson County January home sales decreased 26.2% to 556 sales in Williamson County. Sales dollar volume declined 28.8% year over year to $269,359,523. The median price slightly decreased 4.9% to $437,500 as new listings ticked up 6.8% to 892 listings. During the same period, active listings soared 654.1% to 2,383 listings while pending sales dropped 11.4% to 909 pending sales. Housing inventory rose 2.2 months to 2.5 months of inventory.
Hays County In Hays County, January home sales decreased 11.9% to 245 sales and sales dollar volume also dropped 16.7% to $123,838,974. The median price for homes rose 7.3% to $427,665. During the same period, new listings increased 38.4% to 447 listings, while active listings skyrocketed by 398.7% to 1,192 listings. Pending sales slightly decreased 10.1% to 372 pending sales as housing inventory jumped by 2.7 months to 3.3 months of inventory. (information courtesy of ACTRIS)
National Market Update Realtor.com reports the active inventory of for-sale homes is now 69% above a year ago, with homes spending 14 more days on the market compared to last year, giving buyers more time to evaluate more options. Nationally, home price growth continues to stabilize. The S&P CoreLogic Case-Shiller Index registered a 7.7% annual increase in November, down from 9.2% in October. This was the seventh straight month of annual price decelerations. Existing Home Sales slipped 0.7% in January, but good news came with the annual median price gain falling for the seventh straight month, now just 1.3% up from a year ago. Plus, listings rose and are up 15.3% from a year ago. January’s dip was the smallest in a year, prompting the NAR to observe, “Home sales are bottoming out…with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.” New Home Sales jumped 7.2% in January, up for the second month in a row. Even better, the median price is below a year ago and inventories have made big gains, reaching a 7.9-month supply, giving buyers more options. Spending on residential construction in December was a tick below November’s read. But for all of 2022, residential builders spent just under $900 billion, a 13.3% increase over 2021. Builders took a break in January, shown by a dip in Housing Starts. That was the fifth straight month of declines, but building has hardly ceased—the number of homes under construction is near the highest level on record. Plus, things are looking up. Pointing to the future, permits for new projects edged up in January. In addition, builder sentiment rose in February for the second month in a row, up seven points, to the strongest reading since last September. Black Knight reported purchase loan locks went up 64% from the first to last week of January, the largest jump in five years, as well as a growing trend of homebuyers paying points upfront to permanently reduce their mortgage rate. The Mortgage Bankers Association saw mortgage applications increase 7.4% last week, noting: “Purchase activity that was put on hold last year…is gradually coming back as rates ease and housing demand remains strong.” Freddie Mac’s chief economist observed that with the recent rate drop for the 30-year fixed-rate mortgage, “interested homebuyers are easing their way back to the market just in time for the spring homebuying season.” Altos Research found demand is holding, with more homebuyers able to afford homes at current prices and mortgage rates than there are sellers. Buyers know they can refinance if rates drop, and if rates rise, they made a smart move. The national average 30-year fixed mortgage rate edged up again in Freddie Mac's Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information. The Fed Funds Futures market expects a cascade of quarter percent rate hikes—one at each of the Fed’s next three meetings.