August market update

The market adjustment that I have written about in recent months continues. First, consider these year-over-year changes in the 5-county Austin metropolitan area and in the City of Austin:

The median sales price across the metro is down 7% from August 2022, and the average time it took for a new listing to go from Active to Pending almost doubled over the past year, from 32 days to 60 days. The City shows about the same movement, but prices have declined only 1% and the median sales price remains above $500,000. The number of homes sold and the number of new listings are essentially unchanged, but active listing inventory is accumulating. Economic uncertainties and much higher mortgage interest rates are constraining buyer activity.

Looking at the most populous counties in the metropolitan area you see much the same direction, with the median price in Travis County still above $500,000 even after a 4% year-over-year decline. Williamson County remains relatively more affordable with a median sales price of $435,516, down 8% from last year.

Prices have fallen much more dramatically in Hays and Bastrop Counties, and demand is high with median sales prices below $400,000. Note the 29% increase in closed sales in Bastrop County, but notice also that the average time a listing was actively on the market there expanded from 32 days to 84!

Listing inventories have grown across the region. For comparison, remember that most market economists still consider 6 months’ supply of homes on the market to be “normal” or “balanced.” At 4.8 months, Bastrop County has the most inventory, and it’s the only part of the metro where the dollar volume of sales increased over the past year.

Housing supply is still the most significant challenge across the Austin region (and in most of the U.S.). The traditionally strong summer sales season did not produce sales growth this year, though, and it’s worth noting that the number of homes sold in August 2022 was also down from one year earlier, so unit sales last month were about 23% lower than two years ago!

Our region is still very much in demand for business creation and growth, and for in-migration from other parts of the country, and building high quality inventory is the path to growth. Resale listings are largely grid-locked because most sellers must also become buyers in today’s market environment, so new construction is especially important. That part of the business has its own challenges, but our economic fundamentals are strong and our situation should continue to ratchet toward “normal.”