Has the Austin Real Estate Market Hit a Floor?
Over the past couple of years the Austin real estate market exhibited a significant slowing and deflationary trend followed by a stabilization of the market and a recent increase in activity and pricing - at this point in the market cycle people are starting to ask “has the market bottomed out?” While it’s impossible to give a definitive answer there is plentiful data to explore, much of it pointing to the possibility that we have reached a bottom.
Signs of Stabilization
Market data shows that after a period of steep declines, prices are stabilizing. The average and median home prices are no longer dropping significantly. In fact, recent months have shown either marginal declines or modest increases, a pattern that often signals the market is finding its floor.
Positive Year-over-Year Comparisons
The year-over-year price change, which had been negative for much of the cycle, has turned neutral or slightly positive in the latest data. This is a critical indicator, as it often marks the end of a downtrend and the beginning of recovery.
Improved Activity & Improving Seller Metrics
As a whole the activity index is increasing in most areas meaning that more of the available inventory is going under contract. Furthermore, we are seeing a notable decrease in the months of inventory - again pointing towards an increase in activity.
Why Can’t We Be 100% Sure?
While the data points to recovery, external factors like interest rate changes or unexpected economic shifts could still create turbulence. However, unless there’s a major shock, the data supports the idea that the market should continue to stabilize before entering a more sustained upswing. Continue to follow the Austin Market Cycle to see how the market progresses.
FAQ
1) Are housing prices in Austin going down? From peak, the median sold price has dropped by 21.20%. That being said, November 2024 saw a 3.2% increase over November 2023, suggesting that prices are no longer decreasing.
2) How did the Austin real estate boom go bust? Austin's real estate boom went bust due to a mix of record-high home prices, rising mortgage rates, and eroding affordability, which slowed demand significantly. Overbuilding during the boom created excess inventory, contributing to price drops, while broader economic concerns like inflation further discouraged buyers. These factors together caused the market to cool.
3) Is it smart to buy a house in Austin right now? We know that prices have cooled, inventory has increased, and affordability has improved. Whether or not it’s smart to buy a house in Austin right now comes down to the individual buyer’s current financial situation and real estate goals.
4) Is Austin in a housing crisis? Austin's housing market data shows declining home prices and reduced sales volume compared to the peak of the boom. While affordability remains a challenge due to elevated prices and mortgage rates, the market is cooling, suggesting it's stabilizing rather than collapsing. Indicators like a moderate decline in median sold prices and increased inventory suggest market correction rather than a crisis.
