Real Estate Reflections: This isn't a slow down. It's a stall.
In August, we first hinted that the Austin real estate market would soften up, but that may have been an understatement…
Starting in July we experienced a dramatic drop in the asking-to-sold price ratio for Austin homes (the green columns in the chart below). These days Austin home sellers are only getting 94% of their asking price -- a 6% downward adjustment.
The number of homes sold has also dropped significantly (the blue line on the chart). Meanwhile, home inventory has climbed to 4 months – the highest we’ve seen in ages. I can personally attest that the market is s-l-o-w.
Economics-minded folks would see this as the predictable outcome of lower demand and increased supply.
I see it as a buyer’s market.
The question is how low will we go? And how long will it last?
Domestic and international headwinds continue to stir uncertainty.
Here at home we are dealing with the usual seasonality of the market which typically hits bottom around Halloween. Then there’s the national debt-ceiling negotiation that doesn’t look promising. International conditions are even more depressing as war rages in both the Ukraine and Israel/Gaza, both with deep economic and humane ripple effects back here in the U.S.
It is hard to say how these factors will impact the markets in the short term. Historically, if the Government shuts down, the rest of the world sees that as an “uh oh” moment, and rates could fall. But really, the world is in such a chaotic state that it's hard to place any bets.
Many of our buyers are taking a wait-and-see approach thinking that the market is going to continue to deteriorate. Sellers are aren't sure what to do. For good reason...
This isn’t just a slow down. It’s a stall.
Yet, even in the face of one of the quietest markets I’ve ever experienced in 25 years, I still believe that next year we will see more real estate activity and that prices will climb. People will acclimate to high interest rates. We will get through the holiday seasonal slow down. Life will happen, and people will move.
If I had all the money in the world, I’d be gobbling up homes right now like kids eating candy on Halloween night.
PS: If you have to sell, let us position your home in front of more buyers in the largest online search platform with our exclusive access to Zillow listing Showcase.