Is Austin hot or not? The tale of two markets
So I recently read a report from the Austin Board of Realtors that outlined how the Austin Metro area was having another record-breaking month. It made me pause because that is NOT what I’m seeing Central Austin. To the contrary, I'm seeing prices reduced and homes sitting longer on market. I’m also getting more calls from agents reaching out for feedback or to pitch their listings.
Because of the disconnect between the Board of Realtors report and my own experience, I decided to do a little research.
Yes, the market is shifting. But no, the sky is not falling.
The Central Austin real estate market typically starts to slow down in the fall and begin to pick back up again after Halloween. Rising interest rates are also having a depressive effect. But all in all, the market is behaving as expected.
I don’t think the sky is falling because we still have plenty of jobs coming to Austin, and with that we can expect to see continued growth. Indeed, the Austin Chamber of Commerce recently reported that year over year Austin is the 8th fastest growing metro area in the U.S. The shift I expect is to see a slight slow down in the rate of housing appreciation. Instead of seeing 6% appreciation as we have in the last few years, you can probably expect +/- 4% appreciation, which is a historically normal rate of growth.
But… There is a difference in the Austin Metro market vs. the Central Austin market
So the sky isn’t falling, but my research showed that the Austin market is much hotter in some areas than others.
What’s the difference? Price.
Homes priced under $400k are experiencing a super hot market. The opposite is true for homes over $700k.
If you draw a loop around Central Austin (Highway 360 on the West, Research Blvd on the North, to I-35 on the East, and Highway 71 on the South), you’ll see that is where the highest prices are. Inside this magic Central Austin loop, our average sales price year to date is $975,369 and the median sales price is $769,500. This is where we are seeing a slow down in the market.
If you venture outside of the loop but stay within the Austin city limits, the sales price drops significantly. Here the average sales price year to date is $363,128 and the median sales price is $305,000. This is where the market is experiencing a lot of activity.
Put it all together and you get a real world picture of Austin’s housing affordability problem.
The charts below show you the stats. Here the green line shows this year and how we are doing in the Central Austin loop relative to past years. These homes average around $975k in today’s market.
Here you will see the green line showing what going on in Austin proper but "out of the loop." These homes average around $365k in today’s market.
So what’s it all mean?
If you are looking to buy a home this is historically the best time of the year to make a purchase. Sellers tend to be the most negotiable now.
If you are looking to sell your home and you think it is worth less than $500k, now is a good time to sell. If you’re not in a hurry, you’ll like see even greater gains if you wait to sell in the spring.
If you are looking to sell your home and you think it is worth more than $700k, I would try to hold off on selling until spring. You might consider doing some off-market marketing between now and then, as we continue to have low inventory and you never know what might result from those efforts. I’m happy to talk with you about how to do it.
Of course, each situation is different. Please reach out if you’d like to discuss your personal circumstance or how to win in the current market. We are always happy to chat.