REAL ESTATE REPORT

Austin home prices drop while low inventory spells less affordability for buyers

Austin's median home prices dropped 6.3 percent in January, marking the largest price decrease since July 2011.

Photo courtesy of The Modern Architecture + Design Society

Average home prices decreased last month while inventory remained flat, signaling that the Austin regional market needs more housing. The latest monthly report from the Austin Board of Realtors (ABoR) shows median home prices dropping 6.3 percent in January, marking the largest price decrease since July 2011.

According to the report, the current average home price in the Austin metro area is $450,000. But even with the price drop, homes spent an average of 76 days on the market, only three more days than in December 2022, but 47 days more than in January of last year.

Residential home sales last month declined 27.3 percent in comparison to January 2022, with new listings also seeing a 16 percent decrease year-over-year. However, new listings from December to January increased 63.4 percent to 2,988 homes. ABoR’s report says this trend shows sellers are finding more opportunities in the market, while also demonstrating more active buyers.

Ashley Jackson, 2023 ABoR president, warns that these recent year-to-year comparisons are occurring at an abnormal time in the market. She says January’s data demonstrates a “post-pandemic normal” for the Austin-Round Rock metro area.

“As we reset our expectations to reflect the information our realtor experts are seeing in real-time, we need to look at month-to-month trends to have a true sense of what is going on in the region,” she said in a statement.

Despite the median home price decreases in Austin and Travis County, surrounding areas like Caldwell and Hays counties are seeing the opposite. Jackson says the two outlying counties are “the most affordable pockets in Central Texas.”

“When we have a city like Austin challenged by affordability, the entry point in surrounding areas will slightly increase as people try and find neighborhoods they can afford,” she said.

She predicts rising interest rates and availability of affordable housing will be a much bigger challenge for consumers in 2023.

Affordable housing January home sales Median home prices New listings Rising interest rates austin board of realtors austin real estate market

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Homebuyers can afford to be picky as Austin housing inventory rises

Photo by Avinash Kumar on Unsplash

Housing economist Clare Losey said the most significant factor affecting home sales in Austin is high mortgage rates.

The latest real estate report from Unlock MLS and the Austin Board of Realtors (ABoR) has revealed housing inventory is still on a steady rise in the Austin-Round Rock-San Marcos MSA, creating more choices for potential homebuyers as they navigate a high interest rate market.

Residential home sales dipped by a mere 1.5 percent year-over-year from October 2023, amounting to 2,248 closed sales in the Austin-Round Rock-San Marcos MSA. Median prices have also dropped to $430,000, or 3.2 percent less than this time last year. More than 3,300 new home listings were added on the market — a 7.4 percent increase from 2023 — bringing the total number of active home listings to 11,599.

According to Unlock MLS and ABoR housing economist Clare Losey, Ph.D., October's mortgage rates stood at 6.4 percent and are showing no signs of a significant drop in the near future. Even heading into 2025, Losey says potential homebuyers who are biding their time in the hopes of seeing rates plummet "may be in for a long wait."

"In the meantime, sellers must recognize that bringing buyers to the table requires a more aggressive pricing approach," Losey said. "Even in a more balanced market, buyers with limited purchasing power are struggling to meet current price expectations."

As for the overall health of the Central Texas housing market, 2024 Unlock MLS and ABoR president Kent Redding labeled recent news reports that called Austin "ground zero" for a downturn as an "extreme over-exaggeration."

"Austin led the state and nation in record-breaking home price growth and sales activity during the pandemic," Redding said. "For three years, near-zero housing inventory, numerous offers above list price and a rapid-paced market raised home prices and left little negotiating power for buyers. During this record-setting growth, ABoR and Unlock MLS consistently emphasized the unsustainability of the rapid growth, and now, our market is working to balance those extremes."

Central Texas housing trends in October 2024

In Travis County, 979 homes were sold last month — a slight 2.5 percent increase from last year. Median prices remained flat year-over-year at $510,000. Active home listings continued growing to 5,702 homes, which is 9.4 percent more year-over-year.

In Williamson County, 807 homes were sold in October, with median prices steadily dropping to $420,000. There were 1,028 new home listings on the market, showing a 4.5 percent increase from October 2023, bringing the total number of active home listings to 3,369.

Residential home sales dropped by nearly eight percent in Hays County in October, totaling 315 sales. Median prices also fell 5.5 percent year-over-year to $359,000. Active listings rose 6.6 percent year-over-year to 1,740 homes with the addition of 534 new listings on the market.

Meanwhile, 114 homes were sold in Bastrop County last month, which is 4.4 percent more than this time last year. Median prices dropped by a single percentage point year-over-year to $355,000. There were 654 active listings on the market in October, and 152 new home listings, representing a 1.3 percent slip in new inventory when compared to last year.

Only 33 homes were sold in Caldwell County in October to reflect a near 14 percent decline year-over-year from October 2023. Median prices fell to $262,990, which was a 13.5 percent decrease from last year. There were 136 active homes on the market last month, and 40 new homes added on the market.

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