AUSTIN (KXAN) — The president-elect of the Austin Board of Realtors said she expects “a little bit of a decrease” when it comes to future Austin home prices as the previously red-hot housing market begins to show some signs of cooling off.
ABOR President-Elect Ashley Jackson said she doesn’t expect the price drop to be significant and stressed that the market’s fundamentals remain strong.
Her assessment comes after May home sales in the Austin metropolitan statistical area saw a 6.7% year-over-year decrease, although prices continued to rise by 19.6%.
Jackson talked with KXAN about the trends she’s seeing, and whether Austin is in a housing bubble.
This interview has been lightly edited for length and clarity.
Tom Miller: We’ve seen these skyrocketing home prices in the last few years. But now there may be some indicators that things are shifting. So are we in a housing bubble right now?
Ashley Jackson: No, we are not in a housing bubble. There are indicators that things are flattening out. The market is slowing down a little bit. It’s kind of taking the edge off of the fever pitch that we’ve been in for the past few years. But we are not in a bubble. The demand that we’ve seen in the Austin area over the past few years has been driven by people like you and me coming here for jobs, wanting homes, and we haven’t had enough homes for them. That’s what drove up the prices. There has not been just speculation with people trying to buy low and sell high.
Tom: Can you take that information and say which direction prices are going to be heading next?
Ashley: Right now in the short term I think we’ll see a little bit of a decrease in some areas that won’t be significant. As we have an increase in supply, we have sellers competing against each other just a little bit more. You may find more homes for sale in a neighborhood. But I don’t expect that we’ll see much of a drop going forward.
Tom: You talked about an increase in supply. How does housing inventory play into all of this?
Ashley: Well, housing inventory is driven by supply and demand. In the Austin area, for many, many years, we’ve had really low supply. That was especially true during the pandemic. So the low supply at that point had buyers competing against each other for maybe one house for sale in a neighborhood. As that happened, the housing prices were driven up. Those higher prices were then backed up by what we call an appraisal waiver, which locked in that price for that seller. So the seller knew they would get the prices that the buyers were offering. Now, conversely, we have high inventory, and we’ve got a good selection of homes, more like 2019 numbers, pre-pandemic numbers. So buyers will have a few more options out there. Instead of one house being for sale in neighborhood, you may find two to five houses for sale in neighborhoods. We’re just kind of taking the edge off of what was a wild market for the past few years.
Tom: You also have rising interest rates, how does that factor in?
Ashley: That plays a big hand in the inventory that we have right now. Some buyers found that maybe they were a little priced out of the market, as their monthly payments get a little higher with the interest rate. So we have a few more homes to choose from. And that has helped to take the edge off the market a little bit. We’re also in what I would call the dog days of summer, and everyone’s on vacation. So that is also helping us with inventory right now.
Tom: If you are looking to get into the market, is the recommendation just to wait it out? Let’s see if prices go down, let’s see if interest rates go down. Or is it “buy now” because inevitably prices are going to keep going up?
Ashley: Buy now because we know the conditions right now. The interest rates have actually gone down just a little bit over the past few weeks, making now a great time for a buyer to get out there. There’s more to choose from, you may not have to compete for a home right now. I cannot tell you if we’ll be busier in October. I suspect that we will.