From Abby Normal to Hans Delbrück: Why today's market is great for home buyers & sellers alike.
By Diane Bilke
By all accounts it was AbNormal. The real estate market from December 2020 through about May 2022, where multiple offers were the norm, all cash offers ruled, contingencies were a no-go, long-term seller lease-backs were a thing, and appraisal waivers were all but required.
It was thrilling for sellers and stress+ for buyers ... the real estate market from December 2020 through about May 2022 ... Multiple offers were the norm, all cash offers ruled, contingencies were a no-go, long-term seller lease-backs were a thing, and appraisal waivers were all but required. Buyers regularly ponied-up 10% - 20 % - sometimes even 40% over asking in order to have their offers accepted.
By all accounts it was AbNormal.
Now in January 2023, it's a wholly different market. The big story in the latter half of 2022 was mortgage interest rates. Rates doubled between January and December, further exacerbating an already difficult affordability factor for most buyers and quickly deflating demand for new loans. As 2022 wound down, Travis & Williamson counties had an average of 2.6 months of inventory and YoY home sales had decreased by an average of 21%. For today's sellers, price drops have made a big comeback, and there's been a staggering increase in the length of time homes are staying on the market. Multiple offers are few and far between, perhaps even non-existent.
But, it's not all bad news. In fact, my opinion is that this is a great time to be in the market.
For sellers, the gargantuan value gains achieved across the region since 2020 remain in your favor. While a seller may no longer realistically expect multiple offers over asking, that same seller is able to price their home on average 30% higher today than they would have just 36 months ago. The Austin-Round Rock MSA remains a desirable and sought-after market. Even with the uptick in number of homes for sale, we remain in a positive-demand stage. Experts generally describe a balanced market as having a 6-month supply of homes available to purchase. Remember, we are currently at less than 3-months supply, meaning demand remains strong (though no longer frenzied 😅). If you are thinking of selling your house this year, do it and don't fear. Be wise about it, with realistic expectations based on current facts. Hire an experienced and savvy real estate agent to counsel and guide you, to market, advertise and network on your behalf. The bottom line for sellers is this: price it right and it will sell. Period.
For buyers, there are many reasons to be in the market right now. For the first time since December 2020, buyers can negotiate! The baked-in expectations of offers-over-list-price and waiving appraisal contingencies are gone. Buyers can shop and actually take a minute to consider all their options. Lenders are offering temporary rate buy-down programs that lower approved interest rates for the first 1, 2, or 3 years of a mortgage. As mentioned above, there are more homes to choose from, and the subdued demand means lower asking prices and few-to-no competing offers. The takeaway for buyers is this: if you need or want to buy a home this year and can gain loan approval, then do it and don't fear. Be wise and informed about the real estate market. Get loan approval, know exactly what you are looking for, and work with a knowledgeable, determined real estate consultant to help you get the best deal on the home of your dreams. 🏡
My name is Diane Bilke, Texas REALTOR® brokered by Realty Texas. The "Hans Delbrück" of real estate agents, I help people find their way home throughout Travis and Williamson County, Texas.
Specializing in Georgetown, Round Rock, Leander, Lago Vista, and Cedar Park.
Follow me on the socials @DianeBilke or @DianeBilkeREALTOR.
Call or Text to 817.291.5046. Email email@example.com
* All market data from the Austin Board of REALTORS December 2022 Central Texas Housing Market Report.