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Hi Austin Texas, it is time for your housing market update for the week of December 26th, 2022.
Today we are focusing on 2023 Housing and Mortgage Predictions for Austin and beyond. Let’s jump in!
Austin Housing Market At-A-Glance
The Austin housing market is currently experiencing a Seller’s market.
# Of Home For Sale – 8,500+ homes for sale off the recent high of 10,000. We are close to pre-pandemic houses for sale.
End of December it is common for Sellers to take their houses off the market in order to keep total days on the market (DOM) low. Despite this, there are still many deals to be had in the market, particularly for those who are actively shopping for a new home.
The Silver Linings of a Softening Housing Market in Austin The market has softened somewhat, but it remains a Seller’s market and is expected to stay that way for the foreseeable future. However, there are opportunities for Buyers and Sellers to work together to make deals happen, with the return of seller concessions.
The National Housing Market – As measured by the Case Shiller index, saw a 9.6% year-over-year appreciation through October 202
This indicates a normalization of the market.
However, even with a 2% appreciation, there is still potential for wealth creation in the real estate market.
Median Sales Price in Austin, Texas is $530,000, Down 1% vs same time last year.
This marks the first time in years that the median sales price has fallen.
Note: that we are comparing November 2022 vs November 2021 where demand for homes was high and Buyers were willing to pay above list price. That market was unsustainable due to artificially low mortgage lending rates coupled with big tech announcements and work-from-home still 100% intact.
Days on Market – which measures the time it takes for a home to sell – increased to 48 days, +27 days from the same time last year. Amen!
This indicates that the market is returning to a more normal pace whereby Buyers are able to take the time to consider their options before making a bid on a home.
Austin market remains a Seller’s market and is expected to be a better year for seasoned real estate agents in 2023.
Low Mortgage Rates
Mark’s Prediction: Mortgage rates will reach 5% by September 2023 with the market expecting continued low inflation.
There’s always the potential impact of international events on the local real estate market.
Overall, it seems that 2023 may bring a more normalized real estate market with opportunities for both buyers and sellers.
Wall Street vs Main Street
Jennifer’s Prediction: We will see more Wall Street purchases in 2023 than we saw in 2022. These guys are ramping up. They’re putting away billions waiting to strike. And, I think 2023 is going to see an even bigger chunk of our residential Real Estate being bought up by Wall Street.
Mark: 100% agreement. There’s the anecdotal evidence of what we’re hearing that they’re doing. And, the fundamentals – Real Estate provides shelter to a country that is lacking shelter.
Austin Housing in High Demand
If you’re considering investing in residential real estate, it’s important to act now rather than waiting. The current market presents a unique opportunity for Buyers, as the demand for housing far exceeds the available inventory.
This imbalance is partially due to artificial measures taken by the Federal Reserve and the government, but there is also a significant amount of pent-up demand from people who would prefer to own a home rather than rent.
However, this opportunity may not last for long.
Wall Street investors are starting to enter the residential real estate market, and they are buying up properties at an alarming rate. Not only does this make it more difficult for individual Buyers to compete, but it also means that this new inventory will not be available for primary residence purchases in the future.
In short, now is the time to act if you want to take advantage of the current real estate market. The combination of high demand and low inventory presents a rare opportunity, but it won’t last forever. Don’t miss out on the chance to buy a home in a fair market – start your search today.
As the demand for housing continues to outstrip the available inventory, it’s becoming increasingly difficult for individual Buyers to compete with Wall Street investors who are scooping up properties at an alarming rate.
Builders Are Building For Money Not You and Me
Builders have no incentive to create more inventory when they are already struggling to sell the homes they have available.
Prediction: It’s possible that Builders will actually decrease the number of homes they build in 2023 compared to 2022. There is simply no reason for them to increase competition for themselves when their Sales Reps are already having trouble closing deals.
Builders may shift their focus to building more rental properties and rent-to-own opportunities – it’s all about the numbers – if builders can make more money by offering rental options, that’s what they are likely to do.
It’s also possible that the financing for these types of properties will come from different sources than for traditional home purchases.
Change is In the Air And On The Streets
Residential real estate in the Austin city, surrounding area, state and our entire nation is going through some major changes.
It’s important for potential Buyers to act now if they want to take advantage of current opportunities. It’s uncertain what the future holds. However, we’re both predicting that it’s likely that Builders will focus more on rental options and rent-to-own opportunities in 2023, while the overall number of homes being built may decline.
The residential real estate market is constantly evolving, and it can be tough to predict what will happen in the coming year. However, experts have shared their thoughts on what we can expect to see in 2023.
House Prices: Increase, Decrease or Stay Flat
Mark Karetskiy’s Prediction: Prices in the Austin, Texas area are likely to remain flat with some neighborhoods seeing 1-3% appreciation.
Most buyers are not thinking about a one-year timeline when it comes to real estate investments, and are instead looking at a five-year forecast of around 20% appreciation in both Austin and the Dallas-Fort Worth area.
Jennifer S. Goodman Prediction: We will see a relatively flat year in terms of overall home prices and certain areas around tech companies and those with a shorter commute to the city will see a 5% increase in value.
The importance of considering local markets and micro-markets (location, location, location). Whether you’re a Buyer or a Seller, it’s important to stay up-to-date on market trends and predictions. You want to work with someone who can help you navigate the hyper-local residential real estate marketplace.
Happy New Year. Be free in 2023.
Let’s dig in!
As of Monday there were 8830 homes for sale in Austin Texas which is our highest inventory number of the year .
- There are 365 new listings that came to the market in the week prior (that’s less homes than last week).
- There are 375 home price decreases. (–less houses had price decreases vs last week when there were 2083 decreases
- There are 42 home price increases up from 102 last week.
- There are 132 properties that fell out of contract now back to the market that is 90 homes less from the previous week
- There are 257 properties that went Under Contract (294 down from the week prior).
- There are 337 Pending properties for Sale (also down by 114 homes from last week).
- We saw 557 homes Sold which is down 183 from the previous week ().
- 179 were withdrawn and taken off the market (down 15 houses from last week slightly).
- 80 homes had listings that expired (basically flat from last week when 38 home listing expired).167 Homes are now on hold. (30 more homes on hold vs last week)
When buying a home during a shifting market there’s a lot to think about. This can be a big opportunity if when you have clear goals, up-to-the-minute information and the right REALTOR® by your side. Want to chat? You can reach us HERE.
Mark Karetskiy is a Mortgage Lender at Movement Mortgage. You can find him at Mark10k.com.
Thanks so much for tuning in, we’ll catch you next time!