Austin’s housing inventory was practically wiped out after the post-pandemic housing boom peaked last summer. Now, as affordability remains a challenge, it has the opposite problem.
In the Austin-Round Rock metropolitan area, housing inventory surged to four months in September, marking the highest level in more than eight years, according to the Austin Board of Realtors’ latest market report. Inventory levels were closer to 5 months in Bastrop, Hays and Caldwell counties.
The number of closed sales decreased 18.2 percent year-over-year last month to 2,387, and the median sale price fell by 4.3 percent to $452,080. It’s the latest sign of high mortgage rates putting would-be buyers in a wait-and-see mode until the market recovers more broadly.
The steady drop in buying activity paints a completely different picture than the one from the initial years of the pandemic. New residents flocked to the Austin area at an unprecedented rate, fueling bidding wars and driving up prices to a record high. While home prices have finally tapered off this year, they haven’t come down enough to overcome hiked mortgage rates and motivate prospective buyers.
Moreover, the Austin area’s sales dollar volume dropped 19.8 percent year-over-year to $1.39 billion in September, the report said. Homes spent an average of 65 days on the market, a 24-day increase from the same period in 2022. New listings decreased by 7 percent to 3,644, while active listings rose by 7.8 percent to 10,235.
In addition to higher mortgages, the backlog of inventory can be attributed to overzealous builders, who looked to capitalize on the influx of people and soaring demand, but they might have been late to the punch. For single-family homes in 2022, there were 8.6 building permits issued per 1,000 residents, ranking among the highest in the nation. However, builders didn’t account for major shifts in the market, leaving Austin with a whole lot of unwanted, unaffordable inventory.
“While our current market shows signs of health with more housing supply becoming available, they are not necessarily attractive options for first-time homebuyers or those shopping for more affordable homes,” said Clare Losey, housing economist for the Austin Board of Realtors. “The current inventory level across the MSA demonstrates that while we’ve seen a steady increase in supply over the past year, many of these homes are not attainable for the average Austin resident.”
While the latest report may seem bleak, there are ways for buyers and sellers to take advantage of current market conditions, according to ABOR president Ashley Jackson. Buyers can use the extra time to get pre-qualified, while sellers can work to improve their home’s “curb appeal,” she said.
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