There aren’t enough flame emojis on the Internet to describe the Austin housing market. In 2022, the median home in Travis County sold for $529,000 — less than a 1% jump year-over-year. Phew. 🔥
After some seasonal adjustments announced at the 2022 Central Texas Housing Summit over the summer, prices are continuing on the same trend they have been since July 2022: a slow, hard-to-predict cooldown. But for those hoping to dip their toes in the home buying waters soon, it helps to know what to expect. Put on your floaties, and let’s hear what the local experts predict.
Ashley Jackson, president-elect for the Austin Board of Realtors, said the theme of 2023 is a lack of inventory paired with unwavering demand. Austin is sitting at 2.9 months worth of housing inventory — less than half of what is considered normal by the Texas A&M Real Estate Center. That means the further away you get from the urban core, the more options you’ll have.
Look to the suburbs
While median home prices for single-family homes in Austin are well above $400,000, Melissa Hudson, a local Realtor with eXp Realty said places like Cedar Park and Taylor could get you more space for a lower price.
Buyers hoping to find areas with less competition may want to think about getting a sweet pad in the suburbs. Hudson, a local Realtor with eXp Realty, said prices may be more palatable in nearby cities of Elgin and Uhland.
Worth it to wait?
Both Jackson and Hudson expect that with interest rates likely rising soon, Austinites are unlikely to see a major dip in the market anytime soon. In fact, Jackson predicts that if interest rates rise and push housing prices down, we could see a renewed spike in demand, since the city is still in a housing shortage.
What about renting?
Jackson said Austin rentals are still characterized by high demand — and may continue to be as interest rates rise.
A recent study by Rent.com listed Austin as the No. 16 least-affordable metro market for single renters in the US, with a 8.88% price increase since last year and 1.86% increase since last month.
Jackson said many renters will continue to rent, as some wait for the market to stabilize and for interest rates to push buyers out. In some good news for them, the TAMU Real Estate Center predicts that existing single-family rent and price growth will plateau, with potential to turn negative on a year-over-year basis.
Buyer’s vs. seller’s market
Jackson noted that we may be in an “Austin version” of a buyer’s market, meaning that a buyer may be able to negotiate below the asking price and get seller’s concessions. Hudson was quicker to call it a “buyer’s market,” saying she recommends buying soon and refinancing for a lower mortgage rate later.
The supply + demand problem
Jackson said listings are often sparser through the holidays as people stay put —case in point, the entire housing market saw a 17% listing reduction in the last month.
“People have removed their homes for sale because it’s the holidays — that’s common this time of year — which means there are fewer homes available as we head into the holidays,” Jackson said. “Meanwhile, Texas builders have been facing supply constraints alongside the rest of us, which has led to a slow-down of new construction.”
Hudson’s pro-tip: find a good Realtor when you’re ready to buy.