Realtor · Austin, TX · Member since 2016 · 1k+ posts · 1k+ votes
November 2022 Housing Market Update for Austin, TX MSA
November 2022 statistics have been released for the Central Texas Housing market. There was a slight decrease in median sales price from the preceding month and no change from the preceding year for the entire Austin Metropolitan Statistical Area.
The City of Austin saw a change in month to month median sale price from $555,000 to $530,000 a month to month decrease of $25,000 and a 1% decrease from the previous year. The Austin-Round Rock MSA saw a change in median sale price from $474,990 to $467,995 a month to month decrease of $6,995 and no change from the previous year.
The following infographics and data is courtesy of the Austin Board of Realtors:
Housing inventory for the MSA saw a slight decrease in month to month inventory from 3.2 months in October to 3.1 months for November, and a 2.3 months increase over the preceding year. The City of Austin saw a slight increase month to month inventory from 2.8 months in October to 2.6 months for November, and a 1.9 months increase over the preceding year.
Withdrawn and expired listings continue to remain high. Total volume was down from a yearly apex in October at 1,877. November showed 1,752 listings were withdrawn or expired for the month but this amounted to 86% of the total closed sales of 2,026 as reported by ABOR during that same timeframe. This was a 2% increase in the withdrawn to closed sales ratio seen in October.
The Federal Reserve did increase interest rates in November as well as in December which most likely will keep downward pressure on prices going forward. And they have already indicated additional rate increases are likely coming in early 2023. There is little doubt another increase will come as they have stuck to prior increase committments 5 months running now.
The relatively low volume of new listings and high volume of withdrawn listings tells us a lot. Sellers do not have to sell. The market is feeling the heavy hand of the Fed’s rate hikes but the vast majority of mortgages in place are not forcing owners to liquidate en mass. As long as rates increase I suspect prices will be pushed down, but I do not expect a crash will result from this alone.
December’s stats will not be compiled until mid January so this is the last update within the 2022 calendar year. I wish everyone reading here good luck with your ventures moving into the New Year.
Disclaimer: The information provided here is for educational purposes only, past performance is never a guarantee of future performance.
Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
3y
That may very well be the case. Crashes, at least in stocks, tend to be panic driven. The fed targeting housing costs has indeed halted appreciation nationwide and housing prices are likely to plateau or drift down even in markets with low supply and a growing job base. Not seeing widespread panic or distressed selling in Austin's future. Rents may go down but a lot of landlords with long term tenants are renting below market anyway. New entrants probably didn't cashflow from the get go, but if they can put 25% down in the Austin market they likely have a few options going forward...we are not Memphis.
Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes
3y
The majority of the suburban counties have done very well as expected. If one drills down a bit there are pockets in the city of Austin proper that continue to do very well.
Investor · Austin, TX · Member since 2013 · 680 posts · 1k+ votes
3y
@Bryan Noth, I appreciate Greatly the numbers you post each month. Most real estate professionals try to put a positive spin on a declining market but these numbers should be sounding ALARMS to all, to all put your hard hats on as it is about to get UGLY!
We are in the slow cycle of real estate so we are not so concerned as it will pick up in the Spring, right! I say NO WAY, MY estimate is it will get SIGNIFICANTLY worse in 2023, yes not next qtr only, but the entire year!
Come on guys I know we are trying our best to put lipstick on this PIG but it is not going to hold up in the rain! The elephant in the room is what are the numbers telling us verse the just the numbers.
Terms like: relatively low volume, mostly mortgages are not forcing owner to liquidate en mass (What? Their mortgages are fixed and they haven't lost their job yet, the rise in new mortgage have no affect on older rates); I don't expect a crash will result? These terms are too mild to use at this juncture. I am not a flipper, buy and hold guy but my duplexes have lost 75k-100k in equity just in 6 months. My rents sky rocket up until about 2 months ago now we are even seeing a slow down there even though there are fewer buyers. More and more people are moving in together to make ends meet. Those who bough income properties over the last year might start feeling the pain or at least getting a little anxious.
Is not this the first month that we have declining sale price year over year (in this recent bull run). Yes and in-of-itself you might say it is slightly flat to down (no big trend). Wrong it is down because BuYING has STOPPED and sellers are not listing (they like their low mortgage rates). Sales are down 50% and I predict it will be down that much or more next month and continue into (strong market months) 1st quarter of next year and beyond. Trend line shows a dropping knife. Don't try to catch a droping knife, let it hit the ground before you pick it up or your likely to get CUT. When a market crashes there is alway a point you can see when it crosses the moving average line. What is important is how it crosses that line and when you look at year over year numbers especially this month you see what looks like a leveling off, but that would be wrong. Month over Month shows a CRASH and will be confirmed with the YEAR over Year numbers in the coming months.
Here is why this market is crashing down now. When these thing change there will be a lag effect then things will get better.
1. Inflation is ridiculous high and predicted to be that way for sometime. Results: Mortgage rates continue to rise, cost of goods and service EXTREMELY MORE, disposable income Significantly decreases.
2. Increasing interest rate not only effect real estate buyers and sellers but also companies. Companies stocks drop, their ability to leverage their stocks decrease causing them not to be as liquid to expand (cost of loans too high, possible defaulting on existing loans as business loans are more the floating type right!) So they can't expand, BUT THEY CAN CONTRACT. Contracting by cutting cost, laying off employees, stopping production on the warehouse or manufacturing plants ect. Amazon just layoff 10,000 employees, so did Facebook. You say that is a drop in the bucket. Yes it is but they have to layoff 10k before they do 50k. In the real estate boom how many we're they laying off, that right NONE they were hiring by the 1000s. It is just not Tech, but every where around the nation. Kohler just laid off 1000 employees last week. More are coming.
3. Fed's just announced a .5% interest hike this week. That new continues the significant slide of the Stock and Bond markets. Making worse #2 above. Our government is spending more money than it takes in tax revenue. Nothing new but to the tune of about 1-1.5 Trillion dollars short. Oh, BTW about 46% of the tax revenue goes to pay INTEREST on our existing 40 Trillion dollar debt. Put that in perspective, you have credit card bill and your balance is $50,000 and your payment of $1000 only reduces your balance by $550 dollars. Yeah! The real inflation is because our government spends more than it brings in and raising rates will only put companies and people out of business and jobs.
4. Get your hard hats on......it is coming. Buyers realize it, Sellers can't sell and if they do where do they go? Do they downsize only to get a higher interest rate and if over 65 lose that nice property tax discount unleash a higher taxes. Just look at the closing sales Year over YEAR numbers.......That my friends is a CRASH and in the slow time of year, what is it going to look like when we get to March....it will be worse because last March we were in a buying frenzy when the market starts up. This year the market is NOT GOING TO PICK UP and those numbers are going to be horrendous.
Now, hold on you are probably pissed at me with all this negativity. Well let me say this, if you can withstand this downturn by preparing for the harsh winter like squirrels do with nuts, you can survive this. Be prepared and if you have overextended yourself, start cutting out the luxury items and vacation plans and prepare to hunker down. If you can survive this you will come out stronger in the long run. There will be a lot of dead on side road but after the storm there will be a rainbow. I just don't know how severe or long the storm will be but we are already at a Hurricane 3 and getting stronger. Hoping I am wrong, fearing I'm right.
Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
3y
@Joe Scaparra Not sure the purpose of your predicting the Austin market will come "crashing down." There are plenty of reasons the market may not...and Austin has proved to be a pretty resilient market in the past. No, I am not pissed, just sounds like fear mongering. We all know business cycles. No doubt there are recent job losses and interest rates are elevated, but I am not sure what percentage of the population are immediately affected...most just keep on living their lives.
@Joe Scaparra Not sure the purpose of your predicting the Austin market will come "crashing down." There are plenty of reasons the market may not...and Austin has proved to be a pretty resilient market in the past. No, I am not pissed, just sounds like fear mongering. We all know business cycles. No doubt there are recent job losses and interest rates are elevated, but I am not sure what percentage of the population are immediately affected...most just keep on living their lives.
@Marian Smith, not pissed.......really sounds like it! Fear Mongering, nope just pointing out a major shift from irrational buying to a market that just about shut down. You call that Fear Mongering, I call it reality! Your quote "No doubt there are recent job losses and interest rates are elevated, but I am not sure what percentage of the population are immediately affected...most just keep on living their lives". Just about anyone carrying revolving debt or considering taking on additional debt (like maybe a mortgage, after all this is an INVESTMENT REAL ESTATE SITE) is affected, not to mention ALL OF US are feeling the effects of this higher inflation. But you just keep on living.......good for you, that is what I hope we all do with a little caution going forward with how we might view the near term economic conditions.
Just pointing out the Trend line and how it has done a 180 in just a few short months! I have no conflict of interest not a realtor or lender. But what i am is an old grey hair 67 year old who has a lot of experience under my belt and is not afraid to be called a Fear Monger! Cheers.
Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
3y
"Just pointing out the trend line" is not the same thing as saying the market is coming crashing down. You say you've lost 75-100k per duplex. We all gain and lose about 10% per property every May to December...every year. And your spouting 75-100k losses vs a percentage is not very illuminating. Sounds scary though! And kind of meaningless unless you need to sell. We all saw some crazy high prices being paid but it was a crazy time...super low inventory, super low interest rates, and a bunch of Californians willing to overpay. We all know those crazy days are gone, but that doesn't portend a crash. It just means top dollar days are gone.
Investor · Austin, TX · Member since 2013 · 680 posts · 1k+ votes
3y
Let's revisit this discussion in July 2023. You know, when the housing market historically performs well. Let's see if median sales prices from December are higher than the median sales prices this coming June. I predict that to be the case based on the trends of this market.
Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
3y
That may very well be the case. Crashes, at least in stocks, tend to be panic driven. The fed targeting housing costs has indeed halted appreciation nationwide and housing prices are likely to plateau or drift down even in markets with low supply and a growing job base. Not seeing widespread panic or distressed selling in Austin's future. Rents may go down but a lot of landlords with long term tenants are renting below market anyway. New entrants probably didn't cashflow from the get go, but if they can put 25% down in the Austin market they likely have a few options going forward...we are not Memphis.
Investor · Austin, TX · Member since 2013 · 680 posts · 1k+ votes
3y
@Marian Smith I agree we haven't seen panic selling in Austin and for that matter may not anywhere in the country yet that I am aware of. But we have experienced 15-20% declines from the peak earlier this year. The tell-tell sign to me is the mortgage rates........will they stabilize at current levels, drift back down or continue it's upward trajectory. Stabilize or drift downward and I think our housing market will be fine. However, if rates continue upward and in June '23 we are approaching 9% or higher I think you will see distressed sellers.
The headwind is inflation! Disposable income is declining and economic concerns are affecting would be buyers. At what point is our 40 Trillion Dollar deficit be recognized as the root to our inflation problem. If there is a time not to be over-leveraged this is the time. Large Corporations are foretelling a coming storm......you don't have to look too hard to see hiring freezes and announcement of large layoffs. This is all attributable to higher loan rates resulting in higher cost not only to the consumers but also corporations.
Rental Property Investor · Austin, TX · Member since 2016 · 317 posts · 257 votes
3y
@Joe Scaparra look back at some of my previous posts and see you and I mostly agreed what was coming and we agree now that it is here. What is somewhat perplexing is there are still those in complete denial despite the facts and data right in front of their faces. Happy new year sir.
