AUSTIN HOMEOWNERS 'SCREWED' AS HOUSING MARKET SALES PLUNGE
Austin homeowners hoping to sell their properties for as good a price as they would have fetched a few years ago are now "screwed," according to local realtor Jeremy Knight, as the city's market is flooded with new inventory and buyers become more selective.
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"This is a completely different market than it was a few years ago. I remember not too long ago you put a home on the market for $400,000 and it was immediately selling for $450,000 to $500,000, and that same homeowner was sitting there getting a free lease back and all this fun stuff. That is not the same [now]," Knight said in one of his latest YouTube videos commenting on a recent report from UNLOCK MLS shared by the Austin Board of Realtors (ABOR).
The former pandemic boomtown of Austin, which had seen home prices skyrocket during the pandemic as an influx of out-of-state people boosted competition, saw some of the biggest price drops in the country during late summer 2022-spring 2023. While a historic shortage of homes has kept prices still relatively high, homeowners who used to benefit from bidding wars over their properties recently had to slash prices in an attempt to attract reluctant buyers.
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Newsweek contacted Knight and ABOR for comment by email on Thursday morning.
The Austin-Round Rock-Georgetown metropolitan statistical areas (MSA) had 4.9 months of inventory in May, up from 1.5 a year earlier and the highest level since 2011, according to ABOR's report, after experiencing a 37.7 percent increase year-over-year in active listings. New home listings on the market were up 16.3 percent from May 2023.
This record inventory after years of imbalance between supply and demand is allowing buyers to be more selective while house hunting, as proven by the number of closed listings, which dropped by 12.8 percent in the same month compared to a year earlier.
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But as mortgage rates are still hovering around 7 percent and home prices remain historically high, homebuyers are still cautious in making purchases. While they are taking advantage of the current softening of Austin's housing market, Knight said that the ABOR report indicates that the Texas capital is neither a sellers' market nor a buyers' market at the moment.
Clare Losey, housing economist for Unlock MLS and the Austin Board of REALTORS, agrees. In a press release, Losey said that the current market "does not offer a clear advantage to either buyers or sellers."
The city of Austin alone had an even bigger supply of homes for sale on the market, at 6.2 months of inventory, up 2.7 months from a year earlier. That means that it would take 6.2 months to sell all properties currently on the market in the city if no new ones were added. New home listings increased by 40.3 percent year-over-year, while active home listings did so by 85.3 percent.
Despite the additional inventory, the median price for residential homes in Austin was up 11.6 percent, reaching $608,438 in May, according to ABOR data. The number of residential homes sold was 2.4 percent higher than in May last year.
"If you're a homeowner, you have to hear that and go, 'Okay, I need to price my home accurately' because buyers are going to be incredibly picky, because there [are fewer] buyers and guess what, even though we're at a 6 months inventory, I think it's more of a buyers-friendly market," Knight said.
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