July 2022 Austin Market Update

[David Ivy]

The July 2022 numbers from the Austin Board of Realtors show the Austin metro market continuing to cool and stabilize in response to high inflation, higher mortgage interest rates, record high home prices, and a possible recession in the US. Here are some important notes:

• The median home price in Austin was up 11% over July 2021 at $633,000. The median home in the greater metro sold for around $515,000 last month, which is up 8% year over year. While those are still robust increases, we’re seeing appreciation slow in the Austin area compared to the frenzied times experienced the past couple of years.
• Housing inventory is up to 2.4 months of inventory in Austin, which is 1.5 months higher from this time last year. Greater metro inventory jumped 1.8 months over the same period to reach 2.7 months. This is very welcome to buyers, of course, but it’s also healthy for the market as a whole. Note, however, that we’re still in a seller’s market at these inventory levels. A buyer’s market with falling prices requires around 7 months of inventory at a minimum.
• Pending sales–homes currently under contract–were down very significantly last month compared to July 2021. For example, there were 32% fewer pending sales in Austin compared to this time last year. The metro area's pending sales were down 25% over the same time. At the same time, active listings were up 127% in Austin and 167% in the greater metro. In other words, many more homes are on the market now compared to last year with fewer people in the market to buy them.

Here are stats for Austin the greater metro:

The Austin market is now firmly in decline. But in decline compared to what? It’s important to remember that this is in comparison to the 2020-2021 pandemic and post-pandemic market with frenzied demand for housing in the metro area. We’re unlikely to see that level of demand for the foreseeable future, if ever again. Homes are still selling. Prices are still rising. Multiple offer situations are still a regular occurrence. We’re still in a seller’s market, one that’s arguably much more healthy and sustainable than. So, it's important to keep the broader context in mind.

If you're a buyer who isn't deterred by higher interest rates compared to recent years, then you'll find a significantly more favorable market in the Austin metro area that what you may have previously experienced. You'll have many more properties available with much less competition from other buyers.

If you're a seller, then you definitely can still sell. However, pricing correctly is vitally important at this time, along with preparation and marketing.