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Is the Austin market stabilizing?

Here is an excerpt from the Austin Board of Realtors market report for the month of July, 2021.

As residential home sales in the Austin Round-Rock MSA declined 9.9% to 4,041, the median sales price jumped 37.1% year over year to $480,000—a record for the month of July. At the same time, sales dollar volume increased 20.7% year over year to $2,409,491,114. Monthly housing inventory dipped 0.8 months to 0.9 months of inventory. While the inventory remains well below a healthy average, inventory has slightly increased since the first half of 2021.

Vaike O’Grady, regional director of MetroStudy, said that while the frenzy to buy a home in Austin has steadied from this time last year, it’s unlikely that home prices will go down any time soon.

“Austin is always considered one of the top places to live in the U.S., but we’re losing ground due to shrinking housing inventory and affordability. With construction delays and regulatory barriers, builders and developers are having increasing difficulty getting new homes on the ground. Because of that, there’s not enough supply coming to the market to significantly impact available inventory, which further pushes prices up. Looking ahead, there will likely only be new inventory available further out in the suburbs; meaning, other submarkets may gain traction over Austin.”

In July, new listings increased 8.2% to 5,166 listings; active listings dropped 36.9% year over year to 3,294 listings; and pending sales declined 11% to 3,900 listings. Homes only spent an average of 12 days on market last month across the MSA.

August numbers will be out soon, and we will see if the trend of lower sales and rising inventory continues.  That said, homes that are in desirable areas that are in good condition and are priced well, will continue to sell quickly. Homes that are in less-than-optimal condition may take longer to sell or get what I refer to as “low-ball” offers.  Even worse are homes that are overpriced. They are simply sitting and taking much longer to sell. The best strategy is always to price your home appropriately. Even in the best of markets, overpricing a home is always a bad idea.