According to the Austin Board of REALTORS® June and Mid-Year 2022 Central Texas Housing Market Report, a triple-digit gain in active listings year over year pushed housing inventory levels over two months in the Austin-Round Rock MSA for the first time since November 2019. Combined with a dip in residential home sales activity and slowing pace of home price growth in June, the data indicates a decelerating Austin housing market that is beginning to return to pre-COVID normalcy.
“These numbers are a breath of fresh air for a housing market that has been holding its breath,” Cord Shiflet, 2022 ABoR president, said. “The trajectory of our market over the last two years was unsustainable and it was in no way going to last. The resurgence of activity after the COVID-19 pandemic, historically low interest rates and massive job growth created record-high housing demand in our market. We are now seeing a move more towards pre-pandemic sales activity and inventory.
“The Austin market is by no means balanced and it still favors sellers, but buyers have more bargaining power now than at any point since before the pandemic. Homes still closed at over 100% of the list price on average last month, but REALTORS® have started seeing lower list prices and therefore sale prices, over the last few weeks.”
Last month across the MSA, residential home sales declined 20.3% year over year to 3,441 closed sales as the median price rose 13%, setting a record of $537,475 for the month of June. Sales dollar volume dropped 9.9% to $2,301,865,479 while new listings jumped 19.6% to 6,160 listing.
The number of homes on the market skyrocketed 217.8% to 7,090 active listings, causing housing inventory to jump to 2.1 months of inventory, up 1.5 months from last June. While pending sales dropped 31.6% to 2,887 transactions, homes still went under contract quickly, spending an average of 18 days on the market or four more days than June 2021.
George Ratiu, senior economist and manager of economic research at Realtor.com, weighed in on the recent increase in inventory.
“When we look at the data across the Austin housing market, it reinforces what we see on a national scale—a combination of cooling demand from the tremendous surge in mortgage rates and rising prices with a noticeable increase in supply. The shift signals welcome news for more buyers who may be ready to embrace a post-pandemic reality and take advantage of more inventory. This increase in supply combined with cooling demand indicates the beginning of a more sustainable housing market.”
Ratiu noted that other metropolitan markets in the U.S., particularly throughout the south and southeast regions, saw a similar trend with economic growth attracting buyers, not only from the local markets, but importantly, buyers and new residents from outside their regions, much like Austin.
“People have internalized the narrative that the 2021 market was a normal market and many buyers may have lost hope. Frankly, the 2021 market was anything but normal and this transition signals that more hope for buyers is on the horizon.”
Ratiu and other industry leaders will discuss the current and future state of the Austin-area housing market at ABoR and the Austin Chamber’s 2022 Central Texas Housing Summit on July 19, touching on issues affecting sellers, buyers, renters and homebuilders.
“Home prices are still increasing at a faster pace than the 5-6% that’s historically considered normal. However, that’s still much better than this time last year, when the median price increased 43% year over year compared to June 2020. If you’ve been on the fence about buying a home, you can take advantage of this increased bargaining power and influx of homes on the market. As the fundamentals of our market normalize, buyers and renters need to get their foot in the door, quite literally, and work with their REALTOR® to help them find their next home.” Shiflet said.
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