The Austin-Round Rock MSA housing market continued its normalizing trend for the third consecutive month, boosted by a more sustainable rate of price growth and more available supply, according to The Austin Board of REALTORS® August 2022 Central Texas Housing Market Report.
Active listings in the five-county area skyrocketed 170.2%, causing housing inventory to reach 2.9 months – the highest inventory level since September 2018. Additionally, year-over-year home price growth was less than 6% for the first time since June 2020. The median home price increased by 5.5% annually to $496,039, setting a price record for the month of August while also indicating a normalization of home price appreciation that economists say is consistent with historical norms.
“I want to be very clear—market shift does not mean that we are in a downturn, and it doesn’t mean that Central Texas home values have been overvalued,” Cord Shiflet, 2022 ABoR president, said. “Home prices are still appreciating, just at a more reasonable rate, that’s more in-line with what we have seen historically. Homes are still selling close to list price, which is great news for buyers and healthy for our housing market. If you’ve been thinking about selling your home, it’s important to work with a REALTORⓇ and make sure you’re pricing your property correctly in the middle of this changing market."
In August, residential home sales declined 23% year over year to 2,924 closed sales. Sales dollar volume declined 14.7.% to $1,844,350,661, while new listings dipped slightly at 6.2% to 4,121 listings. Homes spent an average of 31 days on the market, the first time average days on market has topped one month since February 2018.
While the Austin housing market is experiencing an increase in listings and inventory, Mark Sprague, state director of information capital at Independence Title, said that the biggest challenge in 2023 will continue to be inventory.
“Austin, along with the other Texas metropolitan areas, may continue to feel the effects of the previously unsustainable housing market due to the lack of inventory. We are just now getting up to three months of housing inventory, which is still short of the 6 to 6.5 months of inventory needed to be considered a healthy market.”
Job creation and company relocation also continue to impact the region. Sprague noted that with the record number of corporate companies within the past year alone, Austin’s current trajectory does not support the number of jobs and people coming to Central Texas in the next five years.
“The cost of developing and building homes in Austin continues to escalate with little to no relief. This will cause sales to slow, as we see currently with home prices dropping and selling closer to the list price when compared to the past two years. It's important to note that this was demand-driven, and residential homes have not lost value. Regionally, the Central Texas housing market is returning to the robustness of the previous 10 years before the COVID-19 pandemic.”
Shiflet added that now more than ever, elected officials and policymakers should prioritize housing for current and future Austin residents.
“While we are watching market conditions normalize, local leaders can’t take their eyes off the ball—housing is still the most important issue facing our community today, and tomorrow. When it comes to development fees, Austin is 187% more expensive than other cities in Texas like Dallas, Houston, Fort Worth and San Antonio according to the 2022 Central Texas Housing Development Fees Analysis. That must change. Our city needs to take action and make meaningful impacts immediately.”
Read the full original article here.
