Earlier this year, we wrote aboutthe cooldown in Austin real estate following an extended period of meteoric growth. It appears that the new ice age in home buying has spread beyond Central Texas.
On Thursday, May 4, Texas Realtors releasedits 2023-Q1 Quarterly Housing Report, which showed a 17.5% dip in closed sales statewide when measured against Q1 of 2022.
The report, compiled from local realtor associations and Texas Realtors and analyzed by researchers at Texas A&M University, has a few main takeaways.Aside from overall sales dipping to 72,480 last quarter, housing inventory is still below what the agency considers to be a "historically normal" level.
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Listings are taking, on average, 100 days to close between time spent on the market and the closing period, which is 22 days longer than this time last year. In the Insights section of the report, Texas Realtors refers to this, in conjunction with a decrease in sales, as a possible indication that "the pace ofthe market has moderated."
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Echoing what Austin realtors told MySA earlier this year, the folks at Texas Realtors are presenting the data — at least outwardly — as a net positive in that it restores, somewhat, an equilibrium between buyers and sellers. Previously, sellers were at a marked advantage in many markets, leading to low inventory and bidding wars over remaining housing.
"Last quarter, we saw the Texas housing market shift towards a more balanced state between homebuyers and sellers," said Marcus Phipps, 2023 Chairman of Texas Realtors, in a release. "The increase in active listings suggests that buyers in many areas have more options to choose from than they've had recently."
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It's not all doom-and-gloom for Texas Realtors. Even with active listings jumping 113.3% and an inventory increase to 2.7 months from 1.1 last year, median home prices actually increased .6% in one year. That could indicate that demand for housing in the state is still high.
"As the median home price showed a small increase over last year, we're confident there is still strong demand for housing throughout the state," Phipps said. "The increase in inventory was not enough to outpace the demand for housing in the market. While there are more available options for buyers, there is still a significant number of potential buyers throughout the state, which is why median prices are close to what they were in most markets a year ago."
In the Austin-Round Rock Metropolitan Statistical Area, though, the numbers are even more stark.
Median home prices are down 11.2%, closed sales are down 18.7%, and homes are taking 122 days to close, an increase of 46 days year over year. Active listings are up a staggering 377.7%, and inventory is at 3 months, up from just .5 in 2022.
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Texas Realtors believes that mortgage rate increases — up 1.4% from 2022 — are likely to blame for the dip in sales across the board. A higher interest rate obviously excludes buyers from homes they could previously afford, and it disincentivizes sellers from ditching their lower interest rates and re-entering a market with higher mortgage rates.
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Chris O'Connell covers all things Austin. He can be found @theechrisoc.
