Interest Rates Continue to Rise
August 16, 2023 by Laura Duggan · Leave a Comment
Mortgage interest rates have risen 11 times since March, 2022. Each time the rate increases, it raises the price of a home to a home buyer. Take a historical look at the rise and fall of rates.
For a comprehensive look at how the rates are affecting home prices and sales by zip code and price band, take a look at our monthly Market Report.
Laura Duggan, Broker, West Austin Properties, 3312 River Road, Austin, TX 78703, 512-750-2425
Austin Market June 2023
June 28, 2023 by West Austin Properties · Leave a Comment
To understand the Austin residential market, it is important to look at the difference in median closed values over the prior two years.
- In June of 2021, the median home closed price was $398,000.
- In June of 2022, the median home closed price was $550,000, an increase of 38% in one year.
- Then interest rates started to increase, companies began laying off some workers and investors who had been active in the market experienced declining values and expenses increasing.
- During the next 10 months, prices began dropping and by March 2023, the median residential home sold for $442,250, a 10 month decline of 27%.
- March 2023 was the low point for median close prices.
- Since March, by the end of May, home values have increased to $465,000 or an increase of 5% over March 2023.
- Current median home closed prices are approximately where closed prices were in June 2021, two years ago.
- Median home closed prices have been increasing each of the last two months, however these value are still 15% below the highs of June 2022, one year ago.
- Current median homes closed prices would need to increase 18.3% to reach the June 2022 levels.
Year-to-Date Home Sales in Austin
May 19, 2023 by Laura Duggan · Leave a Comment
The number of home sales in the Austin area year-to-date has increased steadily every year from 2013 to 2021. This year our year-to-date sales are behind what they were last year at this time.
Austin continues to have steady demand even though sales have slowed, but there many more homes for sale over last year at this time so buyers have more inventory to choose from.
Several factors have also slowed home sales. Rising interest rates are making homes more unaffordable than in the past when rates were historically low. Home prices have increased and some large employers have begun laying off employees leaving uncertainty about future employment.
In many cases, it is a better time to buy a home than it was this time last year. There are many more homes on the market giving buyers a better selection than they have had in the last several years. More homes means less competition. Buyers are not having to compete with so many other buyers for a home and therefore, they are actually paying much less. Even last Spring, buyers were paying thousands of dollars over the list price to win a bid for a home.
As always, real estate is local and varies by neighborhood and price range. We have been publishing statistics about our market in a monthly market report under the Market Report tab on our website since 2006. If you are interested in specific market data about your home, we are always happy to provide it.
Laura Duggan
Broker, West Austin Properties
3312 River Road, Austin, TX 78703
laura@westaustin.com
512-750-2425
Where is the Austin Real Estate Market Now?
September 30, 2022 by Laura Duggan · Leave a Comment
After over a year of an Extreme Seller’s Market (See Market Report Tab above) where there were fewer than 2,000 homes for sale and prices rose substantially, it all changed in May. There are now over 9,000 homes for sale, interests rates have risen 3.5 percent to just under 7%, inflation has increased the cost of goods and services and home values are leveling off or slightly declining.
What does the future hold for the Austin Real estate market?
According to economist and native Austinite, Mark Sprague, the State Director of Information Capital with Independence Title Company, the Austin real estate market remains one of the most robust in the country, primarily because of increasing job opportunities and people and companies moving to Austin.
According to Mark Sprague:
* Average interest rates will increase to 6.5 to 7.5% over the
next year, and stabilize at the 50 year average of of 7.4%
* The US will go into recession, following Europe and China, that
will last 3-5 years.
* Austin will continue to have consistent housing demand,
however Austin is critically short of homes on the market to
meet the demand and he predicts inventory will decrease 10 to
15% next year. Because Austin rents have gone up over 22%
in the last year, there will be an increase in demand for the
purchase of homes.
* Because the cost of materials have risen between 10 and 50%,
new homes will continue to cost more.
* Current homes values may decline slightly, however they will
increase in the Spring when our demand is traditionally higher.
Mark Sprague’s basic recommendation: Buy now as time will only
cost a buyer more. Austin is not slowing down.
For sellers, homes have to be presented extremely well and priced correctly. He said, “if your house does not sell in 30 days, you have missed getting the most value for your house and should lower the asking price.” Our experience tells us that you should price a house competitively and let the market set the sales price. If you have to reduce the price, buyers will generally ask for a further reduction. Price it to sell so that you avoid having to make reductions.
In this rapidly changing market, extensive experience in real estate is critical to evaluate the “the right price.” If you are a buyer in today’s market, you may pay a little more in interest rate but you likely won’t be competing with other buyers driving the price up. Interest is still the best tax deduction we have, and the loan can always be refinanced when the rate drops. If you are a seller, setting the right price the first time is key in getting top of the market pricing. We can help you figure out how to position the condition and price just right to make it an attractive buy.
As always, real estate is hyper local even by neighborhood. Let us know when it is time for you to make your next move.
Submitted by Laura Duggan, Broker, West Austin Properties, laura@westaustin.com, 512-750-2425.
