AUSTIN (KXAN) — Almost a third of all homes listed for sale in the Austin metro saw a price reduction last month, according to a new report.
Realtor.com, which maps homes currently on the market, looked at data from the nation’s 200 largest metro areas to see which had the highest percentages of listings with price cuts.
Austin ranked second in the country, with 32.4% of listings reduced in price in June. Only Reno, Nevada, ranked higher, at 32.6%.
“This is another example of our market stabilizing after the fever-pitch that we were in during the pandemic,” said Ashley Jackson, president-elect of the Austin Board of Realtors (ABoR).
Austin was the only city in Texas to feature in the top 10 areas with the highest percent of price cuts.
“There have been far more price reductions recently than we have seen over the past few years,” Jackson said. “This is to be expected as the market slows down from the intensity we have seen over the past few years. Sellers are competing with each other to attract buyers and as they do so, they may be compelled to lower their prices.”
Preston Salce, an assisting agent with Legacy Real Estate Group in Austin, says he finds a lot of listings are still priced as if the market hasn’t shifted.
“The majority of these listings sitting on the market could have easily sold at their original list price back when the market was more active, the keywords being ‘back when,'” Salce said. “In most cases, sellers are being naïve thinking they can still sell their property ‘as is’ for top dollar, and the honest truth is that way of thinking leads to price reductions.”
Despite the price reductions, the median home price in Austin set a new record for the month of June at $537,475, according to ABoR. That’s an increase of 13% year-over-year.
But in the group’s Central Texas Housing Market Report for June, there were signs that Austin’s housing market is cooling off and returning to pre-pandemic activity.
The number of residential home sales in June fell 20.3% year-over-year. Meanwhile, the sales dollar volume for the month dropped 9.9%, to just over $2.3 billion.
“The price reduction data is a good indication that we are moving towards a more steady market for now. However, we have only been here for two or so months, and it may be too early to confirm,” Salce said. “We will most likely see this trend continue as we move through a recession, though it will be hard to determine how high the market will bounce back once the economy stabilizes. I used to say it would take a global disaster to slow the Austin housing market, but then we saw what happened once COVID hit.”
There are also more options out there for homebuyers. The number of homes on the market jumped more than 200% year-over-year, to 7,090 active listings in June. That caused housing inventory to increase from 1.5 months in June 2021 to 2.1 months this year.
That’s still far below the 6 months of inventory that ABoR considers a “balanced market,” according to Jackson.
The average home is also on the market for slightly longer: an average of 18 days now, compared to 13 in June 2021, but that’s still way less than the average of 44 days in June 2020.
“Buyers do have more options right now, and our higher inventory levels mean that a buyer can take their time shopping and be a bit pickier about the home they make an offer on,” Jackson said. “Sellers will want to make sure they work with a realtor to price their home for the current market conditions.”
Jackson and Salce both suggest sellers should make sure their home is move-in ready, staged and appealing to buyers.
“I think we are seeing an increase of sellers cutting their price because they originally listed with the mindset of still being in the springtime market, and that has been long gone for a while now,” Salce said. “One of the most impactful pieces of advice I have received over the last month in terms of talking to sellers was getting them to understand that we have to live in the future. If you list where the market is today, there is going to be a good chance of you chasing down the market in the weeks to come.”
And advice for buyers? If you’ve given up over the past few years, reach out to a realtor and start your home search anew.
“There hasn’t been a better time to get into the Austin market!” Jackson said.
“I think 2020 set a new level of expectations from the general public on what the housing market should look like,” Salce said. “Any agent can, and will, tell you time and time again, 2021 was not normal, and I think people continuously forget that.”