Austin Home Prices See Continued Decrease in August
AUSTIN — The latest report reveals a noticeable trend in the Austin-Round Rock-San Marcos metropolitan area regarding home prices. According to recent findings, median home prices have dropped in August compared to the same month last year. However, experts caution that prices remain high and unaffordable for many prospective buyers.
Home Listings Up, Sales Down
The Austin Board of Realtors (ABoR) provided insights suggesting that active home listings are up by 15.4%. Despite this increase, closed sales have seen a drop of 10.4% when compared to August 2023. Clare Knapp, a housing economist associated with ABoR, noted that while more homes are available, the demand from buyers continues to be limited due to affordability issues.
“Buyers are largely being constrained by affordability from both higher mortgage rates and still elevated home prices,” Knapp explained. As of August, the median sales price for a home was $439,990, down from $450,000 in July. However, it’s essential to point out that home prices within the city of Austin have actually gone up by nearly 2% year-over-year, now standing at $585,000.
Mortgage Rates and Market Fluidity
Experts suggest that while decreasing mortgage rates may enhance buyer purchasing power, the home prices remain significantly inflated as a result of the COVID-19 pandemic. According to Knapp, the potential cuts by the Federal Reserve could make the real estate market more fluid.
“Mortgage rates will continue to decline over the next couple of months as the Federal Reserve induces its rate cuts,” Knapp stated. However, she remains cautious, suggesting that those declines might not be large enough to stimulate considerable buyer interest.
Recommendations for Sellers
For sellers looking to navigate the current market successfully, Knapp offers some advice. She emphasizes the importance of getting the pricing right and suggests working with a realtor. Homes that are well-maintained with visual appeal and those that don’t require significant renovations are currently more likely to attract buyers.
“Prices need to come down somewhat to be more aligned with what buyers can reasonably afford,” she mentioned. Due to changing financial circumstances, buyers today often don’t have the same disposable cash they did a few years ago.
Market Trends in Austin
The average time for homes in the metro area to be on the market has increased to 70 days from 63 days in July and 57 days in May. Additionally, homes are selling for an average of 93.3% of their listing prices. When focusing only on the city of Austin, August was particularly challenging, with a lower number of homes sold, fewer pending sales, and a close-to-list price rate of just 92.3%.
As the Austin housing market continues to evolve, both buyers and sellers will need to stay aware of these changes to make informed decisions. In the coming months, how these trends play out could greatly impact the market dynamics.
