real estate report
High interest rates aren't deterring homebuyers in Austin
Real estate experts now have a much clearer picture regarding the resilience shown in Austin's housing market. The latest Austin Board of Realtors' (ABoR) report revealed that July 2022 was when the Austin-Round Rock housing market initially started stabilizing. If current trends continue, ABoR says 2023 will have a "strong finish."
"We now have a direct year-over-year comparison of when our market began stabilizing, and the big fluctuations we’ve previously seen have started to even out," said 2023 ABoR president Ashley Jackson in the report. "Potential buyers who have been on the fence about purchasing a home should know interest rates are settling, and now is the time to act."
Even with interest rates beginning to settle, affordability is still a major limiting factor for potential buyers. According to Dr. Clare Losey, ABoR's housing economist, the median family income in the Austin-Round Rock metropolitan statistical area (MSA) is $122,300 in 2023, which is not enough to afford many homes for sale in the area.
"This means buyers generally can afford a home priced between $300,000 to $400,000, however, less than 40 percent of homes sold in the Austin-Round Rock MSA in July of this year alone fall into this price range," Dr. Losey said. "ABoR’s July housing market data stresses not only the strong, ongoing housing demand in our region, but also the critical need for more housing stock at all price points."
June's real estate report stressed a need for more housing inventory, which continued to be a limitation in July. Active listings in the MSA increased 13 percent to 9,663 last month, continuing a slow but steady improvement for the year.
Dr. Losey pointed out that Central Texas is becoming less and less likely to experience a recession with every passing month. She predicted Austin's strong labor market will allow the region to continue exceeding "national expectations" despite rising mortgage rates.
"With a rise in pending sales and closed sales remaining consistent, this further indicates that buyers are becoming more accustomed to the higher interest rate environment and understand that elevated mortgage rates may continue," she said.
Median prices dropped to $462,000 in the Austin-Round Rock MSA, which is 10 percent decrease year-over-year from July 2022. Homes are spending an average of 59 days on the market, which is 37 more days than this time last year.
More than 1,300 homes were sold in July 2023 in Travis County, with median prices dropping 9.2 percent year-over-year to $545,000. There are 4,697 active listings on the market; about 16 percent more than July 2022.
Fewer than 900 homes were sold in July, with median prices sitting at $428,350. There are more than 1,200 new home listings in Williamson County, with a total 2,788 active home listings.
Exactly 400 homes were sold in July in Hays County, with median prices continuing to fall to $405,243. Pending sales are up by 27.3 percent year-over-year, while active listings have also risen 31.1 percent to 1,493.
Bastrop County has the highest inventory in the MSA at 4.6 months' worth, which is 1.2 months more than July 2022. 132 homes were sold this past July, and median prices are just under $350,000 (a 15.7 percent decrease). There are 25.6 percent more active listings on the market in Bastrop County, coming out to 545 homes.
Homes in Caldwell County sold for a median of $298,048 in July, which is a massive 20 percent drop year-over-year. 44 homes were sold last month, which is nearly 23 percent less than the year before, and there are 140 active homes on the market.