AUSTIN (KXAN) — A new report shows housing prices in Austin are cooling off the fastest this year compared to other cities that boomed during the pandemic.
The latest data shared Monday from real estate company Redfin showed Austin’s median price per square foot went up 1.3% year-over-year in October. Despite that slight increase, it’s still 23 percentage points lower than what Redfin reported in February earlier this year. That difference makes it the biggest drop in home-price growth over other American cities like Phoenix, Arizona; San Jose, California; Las Vegas, Nevada, and Boise, Idaho.
Sheharyar Bokhari, Redfin’s senior economist, explained in a news release why this may be happening here.
“The forces slowing the housing market, such as high mortgage rates, are having an outsized impact on places like Austin and Boise that saw home prices skyrocket over the last few years,” Bokhari said in a statement. “Home prices can only rise by double digits for so long before the growth becomes unsustainable. High rates and stumbling tech stocks are making it unsustainable quite quickly, especially in destinations popular with tech workers. Plus, many of the out-of-towners with big budgets who wanted to move into those places already have.”
Lisa Muñoz, a realtor with The Muñoz Group at Realty Austin, said the findings from this report reflect what she’s seeing such as “for sale” signs staying up longer now across the city.
“We had exuberant price appreciation for the past couple of years. It wasn’t sustainable,” Muñoz said. “Lots of people moving to Austin, we had very little inventory and so we’re seeing more of a normalizing of the market right now, actually. It feels pretty extreme compared to where we were, but we’re actually coming back around to more normal times on market.”
She attributes that change to two things: interest rates doubling this year to nearly 6 percent and more homes coming onto the market.
“Inventory was about 1,500 [homes] at the beginning of the year,” Muñoz said. “We have almost 10,000 houses on the market right now, so more inventory means a big softening in prices.”
In September, KXAN spoke with others from Realty Austin about home prices trending downward, creating more favorable conditions for those looking to buy a home.
As various indicators point to Austin becoming less of a sellers’ market, Muñoz said she’s telling clients that the climate is more ideal to buy.
“It’s rare to see a multiple offer situation right now,” she said. “In fact, buyers are able to negotiate sometimes on the front end. Sellers are paying some closing costs. They’re buying interest rates down. This is a really great time to get into the real estate market.”