During the pandemic, home values in the Austin market soared by more than 50 percent with some reports stating the price increase was almost 70 percent. Many sellers are now experiencing "sellers' remorse" for not selling during the height of the market and are reluctant to adjust prices closer to pre-pandemic levels, which is more in line with our current reality.
For those who didn't-or couldn't-buy during the frenzy, there is an expectation that today's increased inventory combined with lower demand should translate into lower prices. That expectation is justified:
- Prices traditionally move inverse of interest rates
- Increased supply plus lower demand also results in lower prices
While prices have dropped since the top of the market in 2021-22, they are still significantly higher than in 2019 before the onslaught of covid. Until prices drop to the point that buyers are willing to engage, the stalemate between sellers are buyers will continue.
The good news for buyers is the pressure for lower prices is mounting. Mortgage rates are holding fairly steady in the upper 6 percent range despite two rate cuts by the Federal Reserve and it's now unclear how much more the Feds will lower rates. Adding to that pressure is the expectation that the level of housing inventory in the Austin market is likely to grow significantly come the spring selling season.
At some point, the housing-market cold war must come to an end. Buyers need to buy. Sellers need to sell. The population of the Austin MSA is still growing and people moving to this amazing metro still need a place to live.
What's needed is a resetting of expectations and a willingness to negotiate. Understand that all markets are cyclical. Prices go up and then drop. Eventually, they will go up again.
I believe that right now and over the next few months will be one of the best times to buy in the Austin market in nearly a decade. If you are interested in buying or selling in the Austin metro, contact me. I'm here to answer questions, recommend trusted lenders and negotiate the best possible outcome for your sale or purchase.
By Barbara VanDyke, Broker Associate, @properties Christie's International Real Estate, Seniors Real Estate Specialist, GRI, CLHMS, CNE ©2024, Written entirely by the author, not by Al. Author reserves all rights. No part of this article may be used without written permission and appropriate citation.
