Austin Housing Market Report August 2024

Staying informed about the Austin housing market is crucial whether you're looking to buy or sell. With fluctuating mortgage rates, changing inventory levels, and shifting buyer demand, making informed decisions is essential in this dynamic environment. In this blog, we'll dive into the latest trends, analyze key indicators, and discuss what these changes mean for you.

As we move into fall, Austin’s real estate market is seeing a surge in available homes and a drop in prices. With the number of homes for sale up 15% and median prices down 4% compared to last year, buyers are gaining more options and negotiating power. Homes are also staying on the market longer, averaging 70 days, putting added pressure on sellers to price competitively and offer concessions to attract serious buyers. With mortgage rates dropping to their lowest point in over a year and inventory growing, buyers are finding more purchasing power to secure a home at a better price. This report will cover what you can expect this season – from industry changes to why early fall might be the best time to buy or sell in Austin’s housing market.

Let's take a closer look at the latest trends from August and what they mean for you:

• Homes actively for sale rise – the number of homes on the market has risen by 15% compared to last year, giving buyers more options.
• Home prices decline—Median home prices are now at $439K, down 4% from last year and 2% from last month.
• Time on the market increases — Homes are now on the market for an average of 70 days, up 8 days from last year, indicating a shift towards a more balanced, buyer-friendly market.
• Buyer demand increases— Pending sales increased by 3% compared to last year and <1% from last month.
• Home sales decline — Home sales decreased by 10% compared to last year and by 2% from last month.
• Housing supply and inventory — Housing supply stands at 4.9 months, up by 1.1 months from last year.
• Current market snapshot — Over 12,000 homes are for sale, selling on average for 93% of their original listing price. 

A Shift Toward a More Balanced Market
After years of favoring sellers, Austin’s housing market is becoming more buyer-friendly. "A balanced market occurs when neither buyers nor sellers hold a distinct advantage," explains Tom Thornton, Agent Success Manager at Realty Austin Compass. This year's combination of generally higher interest rates, high inventory, and continued market price adjustments has led to an unusual sales cycle." 

For sellers, pricing their homes correctly and using effective listing strategies are more important than ever. Overpricing their property could lead to fewer offers and longer time on the market, ultimately resulting in price cuts. For buyers, more inventory means more flexibility and less competition.

Mortgage Rates: What to Expect This Fall
The Federal Reserve recently cut interest rates by 50 basis points, marking the first rate cut since 2020. While this is a significant move, it doesn’t necessarily mean mortgage rates will drop dramatically right away. Mortgage rates have already fallen to around 6.09%, the lowest they’ve been in 19 months, and experts expect rates to remain relatively stable through the end of the year.

"Even with the recent Fed rate cuts, buyers shouldn’t expect big drops in mortgage rates because they’re influenced by more than just the Fed's decisions," explains John Coake, Vice President of Sales at Realty Austin Compass. "Mortgage rates are closely tied to things like inflation and the bond market. Since many lenders have already accounted for these rate cuts, it's better to lock in a good rate now rather than waiting for a substantial drop that may not come."

For buyers, now is still a good time to explore your financing options and take advantage of improved affordability. With rates at their lowest point since early 2023, you’ll have more purchasing power than just a few months ago.

Navigating Recent Industry Changes That Affect Your Sale
New business practices mandated by the National Association of REALTORS® (NAR) are changing how buyers present offers. It’s helpful to understand that these changes don’t necessarily impact the amount a seller will walk away with. 

“As a home seller in Austin, it’s essential to be ready for a wider range of offers in today’s evolving market,” noted Jennifer Korba, Agent Success Manager at Realty Austin Compass. “Buyers are now more likely to request concessions or assistance with closing costs. Understanding these potential asks and how they impact your bottom line can help you make informed decisions when reviewing offers. Staying prepared ensures that you stay in control of the negotiation process and keep your financial goals in focus.”

"As we move into the fall season, sellers are more likely to offer concessions to attract serious buyers," explains Amanda Dudley, Agent Success Manager at Realty Austin Compass. "This creates a great opportunity for buyers to negotiate better terms and get more value from their purchase."

Fall Forecast: Why This Season is the Sweet Spot for Buyers
If you’ve been sitting on the sidelines, waiting for the right moment to buy, early fall could be your sweet spot. Buyers will likely see the best balance of favorable conditions between September and October, including more available homes, lower prices, and reduced competition.

“Mortgage rates are at their lowest point in 19 months, and sellers are more willing to negotiate, making it a prime time to secure a good deal on a home. Now is the time to act if you want to maximize your options and minimize your competition,” explains Amanda Dudley, Agent Success Manager at Realty Austin Compass.

Take Action This Fall
If you're considering moving this season, now is the time to start your search or list your home. Connect with a local real estate agent who can guide you through the process and help you confidently navigate the evolving market.

Your Moves Inspire

At Realty Austin Compass, your moves inspire us to guide you through your real estate journey. Our agents help you navigate market trends, decode pricing dynamics, review contracts, and leverage negotiation skills to secure the best outcome for you. Connect with one of our local agents today to confidently navigate your next move.