As we navigate the final quarter of a complex year, I want to equip you with essential insights into Austin’s ever-changing real estate market. While the landscape has been unpredictable with continued interest rate hikes, understanding it is key to seizing potential opportunities.
A recent analysis comparing August 2023 to August 2022 offers these key takeaways:
- A 7.6% decline in median home prices, now at $460,000.
- A 12% surge in active listings.
- A modest 1.4% increase in closed sales.
- A leap from 2.8 to 3.8 months in inventory.
- Interest rate hikes have caused rates to reach 23 year highs
The main culprit?
However, this is not a cue to hit the pause button on your real estate ambitions.
Here’s why:
Supply Dynamics
Despite the high rates, the market is still tight on supply. The ‘golden handcuffs’ of low interest rates have current homeowners hesitant to sell, while some leverage their low rates for real estate investment. Expect a consistently low resale supply.
Motivated Sellers
The last quarter tends to see more eager sellers. Paired with dwindling buyers due to high rates, this makes for a ripe environment for those ready to commit.
Robust Demand
Austin’s growth is nowhere near a full stop. Companies like Tesla and Samsung continue their expansion here, ensuring a strong, albeit slowed, demand.
The sole factor putting the brakes on demand and appreciation? The Federal Reserve’s relentless rate hikes.
Though we might feel we’re in a buyer’s market, the numbers tell a different story. The general rule of thumb is that 5-6 months of inventory signals a balanced market. Currently, we’re still below that, technically positioning us in a seller’s market. But it’s a far cry from the last two years when homes were flying off the shelves, often at prices above asking, within hours of listing.
Media
As a 20-year veteran in this industry, I can tell you the media reports are often behind the curve. Their ‘buyer’s market’ could actually be your golden ticket to invest at lower prices and gain negotiation power.
While I can’t predict the future, opportunities exist to creatively weather the high-interest storm. Tactics like interest rate buy-downs and seller credits can provide short-term relief, allowing you to lock in today’s prices and refinance when rates eventually drop.
Barbara Corcoran recently said, regarding these interest rate hikes, “The minute those interest rates come down, all hell’s going to break loose and prices are going to go through the roof.” So, while rates are high, now may be the time to lock in lower prices, using creative solutions like rate buy-downs and seller credits to navigate the present costs.
Mortgage Minute, Marie-Lynn Dunn
Cross Country Mortgage | NMLS 1119271
It’s unmistakable that we’re navigating through a turbulent ocean of mortgage rates at the moment. The rates are not only on an uphill climb but are also displaying exceptional volatility on a day-to-day basis. This is not your typical market scenario; we’re dealing with rates that are at 20+ year hights. If you’re considering making an offer in the current market, it’s absolutely imperative to consult with your lender about the most up-to-date rates on the very day you’re making that offer.
The market is complex, but it’s navigable with the right insights and strategy. Feel free to reach out for a tailored consultation.
Until next time… keep smiling… be kind… and stay safe out there 🙂
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