Austin Housing Market Report November 2023

 

In November, home prices in Austin went down by 8% compared to last year, settling at $424K. This signals improved affordability. The number of homes available to buy went up by 0.7 months compared to last year to 3.7 months of inventory, giving buyers more choices. The recent passage of the Home Options for Middle-income Empowerment initiative further enhances housing prospects. An increase in new and active listings provides relief from previous market constraints – all positive changes creating a more normalized market.

 

Let's explore the main points from the November 2023 Austin real estate market:

 

• Increased homes for sale – The number of homes for sale increased by 7% compared to the previous year, giving buyers a broader selection.

• Extended time on market – Homes now stay on the market for an average of 75 days, up by 7 days from the previous month and 18 days longer than a year ago. Tip: For sellers, patience is crucial. Pricing correctly and presenting the home well are essential for attracting buyers.

• Increase in new listings – New listings increased by 11% compared to last year, signaling a healthier and more dynamic real estate market.

• Boost in buyer demand – Buyer demand increased by 9% compared to last year, indicating sellers may experience heightened interest in their properties.

• Slight increase in home sales – Home sales increased by <1% compared to last year and held strong month over month, showing a steady housing market.

• Housing supply and inventory – Housing supply currently sits at 3.7 months. This time last year, housing inventory was at 3.0 months.

• Current market snapshot – Currently, there are over 9,000 homes for sale, with more than 4,000 homes seeing a price reduction in the last month. 

 

 

Mortgage rates falling below 7% ignite holiday home buying. The sustained drop is attributed to the Federal Reserve's indication of potential rate cuts in 2024. Freddie Mac's survey reveals increased activity in both home purchases and refinancing. The Mortgage Bankers Association found that demand for buying homes went up in five of the past six weeks, and refinancing went up by 19% last week, which is 27% more than last year. This signals an opportune moment for buyers and refinancers to benefit from favorable market conditions. Freddie Mac believes, “Given the Federal Reserve Board’s current expectations that they will lower the federal fund's target rate next year, we likely will see a gradual thawing of the housing market in the new year.”

 

Home Prices and Market Dynamics

Despite consumer concerns, experts project a continued nationwide upward trend in home values. Fannie Mae's survey reveals that while nearly one in four consumers predicts a fall in home prices, national forecasts suggest a steady rise over the next five years. Recognizing home price appreciation as cumulative, even with a projected dip in 2024, the overall outlook remains positive.

 

"Homeownership is a lasting investment, and our region consistently demonstrates appreciation. In Austin, homeowners holding their properties for four years or more have seen a notable 35-40% boost in equity since 2019. This highlights real estate's enduring value and reaffirms its reputation as a wise long-term financial choice,” said Jennifer Korba, Agent Success Manager at Realty Austin Compass.

 

The National Association of REALTORS® (NAR) anticipates a significant boost in existing home sales, projecting 4.71 million transactions in 2024. Austin was named by NAR as the “top real estate market with the most pent-up housing demand next year.” 

 

"With an uptick in existing home sales anticipated, Austin’s robust housing demand positions it as a standout market. The overall positive outlook, marked by stable median home prices and improved affordability, paints an optimistic landscape for potential home buyers and sellers in the upcoming year," noted Amanda Dudley, Agent Success Manager at Realty Austin Compass.

 

Austin emerges as a top performer, having seen a 7.4% GDP surge in 2022, outpacing other major Texas cities in the latest CenTex Economy Update. Beverly Kerr, VP of Research at Opportunity Austin, attributes this growth to the influential professional and business services sector. Austin's economic prowess is evident in its second-fastest real per capita GDP growth among major metros.

 

“Our agents are pleased to see buyer demand increasing modestly as we head into 2024. The positive national economic outlook and declining mortgage rates may be driving this change. This could offer winter homebuyers an opportune moment to shop a great selection of homes at more favorable prices than a year ago,” explained Tom Thornton, Agent Success Manager at Realty Austin Compass.