Real Estate Trends in Austin, TX 2023
By Kayleen Reyes
Austin, Texas has become one of the most sought-after destinations for homebuyers in recent years.
Austin, Texas has become one of the most sought-after destinations for homebuyers in recent years. Its vibrant culture, strong job market, and desirable lifestyle have attracted a surge of interest in the local housing market. To gain a comprehensive understanding of the current trends and dynamics, let's delve into the real estate data from the first half of 2023 in Austin, Texas.
At the beginning of this year, the median home price dropped 6.3% in Austin, the largest price drop since July 2011. Along with the price of a home, the amount of closed sales decreased as well with houses staying on the market an average of 76 days, up from 29 days last year. It is important to note that as prices decreased for Austin and Travis County, the surrounding Central Texas area were experiencing a rise in median home prices.
Coming out of the pandemic and an abnormal market over the past few years, the housing inventory for Austin increased to 2.6 months, up from Januarys' 2.3 months, in February. Understand that this increase gives buyers more options and negotiation power while giving sellers ample time to think of the best course of action. A healthy housing market inventory of 5 to 7 months is considered to be the most ideal for both buyers and sellers.
Following its predecessor, March topped the inventory with 3.0 months worth with 4,385 residential properties hitting the market. Our ABoR president stated this is three times higher than the amount on the market a year ago. As active listing skyrocketed 377.7% from March 2022, pending sales saw a decline of 7.4% with actual home sales dwindling 24.6% with 774 sales. With all these reducing numbers, it is interesting to see the resilient Central Texas only had a decline of 14% in home sales while the national cutback was at 22.7%.
With added inventory shedding light to a stabilizing housing market on the horizon, homes sold in May 2023 were at 94% of their original listing price. In comparison to May 2022, a homebuyers' purchasing power this year declined about 8-9%. With the highest it's been all year, averaging 6.4%, mortgage rates were a key factor to this outcome. To aid the stability of the market, moderation in home prices assisted to fight the decrease in purchasing power. The outcome, in fact, decreased the monthly mortgage payment anywhere from 3-4% when compared to last May.
As we walk into the back half of 2023, we can see the Austin housing market finding its balance again. Becoming more attractive, listing prices are getting closer to the price homes are being bought at. This demonstrates sellers are accurately pricing their home and buyers are more accepting to this unlike the beginning of the year. The surge of people moving to Austin is not projected to slow down, driving the need for residential real estate and aiding in the rapid recovery of its local economy.