No, Henny Penny, The Sky Isn't Falling...
By Cyndi Bell
Do you know the character, Henny Penny? This children’s fable would run about claiming the “sky is falling! the sky is falling!” because the character has a mistaken belief that disaster is imminent. So, in the real estate market, I deal withbuyers and sellers on a daily basis with that mindset
Do you know the character, Henny Penny? This children’s fable would run about claiming the “sky is falling! the sky is falling!” because the character has a mistaken belief that disaster is imminent. So, in the real estate market, I deal with buyers and sellers on a daily basis with the same mindset: the sky's falling, the real estate market is going to crash.
In the video link, I provide a graph that provides historical data I discuss in the article. The short answer is that we're not in an imminent crash, and what we are dealing with is getting back to normal. For the last two years here in the Austin market, we experienced a very odd market, what I call the COVID market. And we're finally working our way out of that, which is phenomenal.
According to data compiled by Texas Realtors and the Texas A&M Real Estate Research Center, for the month of July the median sales price in Austin, Texas, is up 8% year over year, while active listings are up 167%.
We didn't have this volume of listings last year. As of now we have a similar number of listings in 2018, 2019, and we need listings in the Austin metro area. It's a good thing that listings are coming on the market. If you put your house on the market this summer, thinking that we were selling in a 2021 market where we had very little inventory, you probably got a shock that maybe your house didn't sell.
And that's okay. We're just now finally getting back up to 2.7 months of inventory. It has been a very long stretch since we've had 2.7 months of inventory. I see this as we are returning to a healthy, and I would still argue a sellers’ market, if marketed and priced appropriately. For sellers and buyers, it looks like we have all these homes that aren't selling. And that's not the case, they are selling. If we go back and look at historical sales data, we see that we are having the same amount of inventory sell. It's just that we had such a ramp up from January 2022 to July 2022, this elevator of inventory hitting the market so fast. There are just not enough buyers to absorb all of it.
The Austin real estate market is no longer this frothy environment that we had over the last two years, in which the seller could put up any product, at any sales price and it would sell in any condition. As we even out in inventory and return to a normal cycle of inventory, going up and down and off and in and out of the market, you will just have to make sure that you hire a real estate agent that keeps an eye on these stats and is able to help you negotiate the best deal.
Buyers have choices, sellers have choices. So if you have any questions about how to get your house on the market or how to buy a home here in the Austin area, feel free to give me a call. You can find my contact information on my website. I'm happy to have a conversation.