AUSTIN, Texas — Austin has a lot of homes on the market for people to choose from, but home prices are still not as affordable as some buyers would like to see.
According to a new report from the Austin Board of Realtors, active home listings in the Austin-Round Rock-San Marcos market increased by 15.4% this year.
“We have over 12,000 active listings on the market. That's more than we've seen, really, in over a 13-year span,” Housing Economist Clare Knapp said. “Home prices are just a little bit too high still in the Austin market for buyers."
Despite the median home price dropping by 4.4% to $439,000, and mortgage rates slightly decreasing by half a percentage point, Knapp said it's not enough to entice buyers like it did during the COVID-19 pandemic.
“They were flying off the shelves ... Stories about homes being sold sight unseen. It’s certainly a different market, in that sense,” Knapp said.
Austin was seen as a desirable place to move in 2020, according to Knapp. She said some homes were selling within 20 days on the market.
“Mortgage rates were just so low,” Knapp said. “They were at historic lows during COVID and so that really propelled home sales and buyer demand.”
As demand soared, so did home prices. But Knapp said prices have not decreased enough as sales have slowed down 3%, and closing sales down 10%. Now, houses are sitting on the market for 70 days on average.
Knapp said the Federal Reserve is predicted to lower interest rates next month, and will continue those rate cuts through November and December into 2025. She said that would help lower mortgage rates, but that doesn't mean home prices will drop.
“If home prices don't budge, we'll likely just continue to see this decline in sales activity, or at least a stagnation in sales activity,” Knapp said.
While these factors indicate more opportunity for buyers, home prices need to decrease further to significantly impact sales growth across the region.
Knapp said this is a critical time for sellers to consider their asking prices and it's a critical time for buyers too.
“Buyers should understand just how much supply is on the market and to really use that to their advantage in terms of pricing their situation correctly," Knapp said. "Finding the right location for them. The right home for them."