Region Now Has More Inventory, Increasing Interest Rates and Construction Costs Contributing to Affordability Issues AUSTIN, TX — In 2022, the median price for a home in the Austin-Round Rock MSA set a new annual record of $503,000, according to the December 2022 and Year-End Central Texas Housing Market Report released by the Austin Board of REALTORS®. Despite this record, the housing market continued shifting towards buyers as home sales declined 18.3% to 33,547 homes sold last year and inventory increased, with homes on the market for 31 days, 11 days more than in 2021. In the month of December, closed listings across the MSA declined 31.5% to 2,435 year-over-year as sales dollar volume decreased 36.1% to $1,357,155,494. Median sales price dropped 3.7% to $457,426. New listings declined 15.1% to 1,828 listings, active listings skyrocketed 275.4% to 7,493 listings, and pending sales dropped 22.8% in December to 1,949 sales. Last month, homes spent an average of 73 days on the market, 47 more compared to December 2021.
"After two years of unprecedented demand, activity and price increases, our housing market began to stabilize in 2022,” Ashley Jackson, 2023 ABoR president, said. “Signs point to that trend continuing in 2023 even as interest rates fluctuate, so buyers need to date the rate and marry the house. Bidding wars have subdued as homes on average sold for only less than the original listing price in 2022, but as we head into what is normally a seasonal peak for sales, today will still be the most cost-effective time to buy a house. It is important to remember that we still have a desirable and sought-after market, it is just that now we are seeing our market return to a more normal level of high demand and activity than what we experienced in the years leading up to the COVID pandemic and subsequent boom in our market.” "December tells us a lot about how the market has shifted and started to rebalance as there was a sales price drop and a staggering increase in how long homes take to sell. If you are interested in purchasing a home, now is a great time to work with a REALTOR® to find something that works for you and your budget.”
City of Austin In December 2022, the median sales price in the city of Austin dipped 4.5% to $525,250. Residential sales decreased 47.4% to 593 sales, and sales dollar volume also decreased 49.7% to $390,054,396. During the same period, new listings dropped 24.2% to 488 listings, while active listings increased 227.8% to 1,780 listings, and pending sales fell 31.9% to 539 pending sales. Monthly housing inventory increased 1.6 months year over year to 2.1 months of inventory.
Travis County
In December 2022, residential home sales decreased 44.9% to 984 sales as sales dollar volume in Travis County dipped 47.8% to $649,319,748. Additionally, the median price decreased 2.8% year over year to $520,000. During the same period, new listings declined 16.5% to 825 listings, while active listings ballooned 250.6% to 3,166 listings and pending sales decreased 27.6% to 873 pending sales. Monthly housing inventory rose 1.9 months year over year to 2.4 months of inventory
Williamson County During the month of December, residential sales in Williamson County decreased 21.9% to 927 sales, and sales dollar volume decreased 21.3% to $464,228,556. The median price dipped 0.4% to $439,250. In December, new listings decreased 22.1% to 595 listings, while active listings skyrocketed 374.7% to 2,549 listings. Pending sales dropped 22.7% to 676 pending sales. Housing inventory increased 2.2 months year over year to 2.7 months of inventory.
Hays County December 2022 home sales in Hays County dropped 8.0% to 366 sales, and sales dollar volume decreased 14.9% to $182,413,098. The median price for homes increased 5.5% to $427,700. During the same period, new listings dipped 13.7% to 253 listings, while active listings rose 212.2% to 1,155 listings. However, pending sales decreased 4.4% to 308 pending sales. Housing inventory more than doubled, increasing by 2.1 months to 3.1 months of inventory. (information courtesy of ACTRIS)
National Market Update New Home Sales headed up 2.3% in December. They’re still down from a year ago but the recent trend has been positive—nationally, sales activity has been rising for the past three months in a row. More good news: the supply of completed homes has risen rapidly. There is now a 9.0 months’ supply of new homes for sale, a significant increase from the 3.3 months’ supply early in the pandemic. Housing Starts dipped a tick overall, yet it was all due to multi-families—single-family starts rose for the first time in four months, scoring the biggest monthly percentage gain in more than a year. Permits fell a bit, but builders have their hands full, with homes under construction at the highest level going back to 1970. And with the recent drop in mortgage rates, homebuilder sentiment rose for the first time in 13 months. Construction Spending on residential projects in November was a tick below October’s annual rate but 5.3% higher than a year ago. The slowdown was in single-families. Multifamilies were up 2.4% for the month. Also encouraging, the Pending Home Sales index of signed contracts on existing homes rose for the first time since last May. The NAR observed, “recent declines in rates are clearly helping to stabilize the market.” Existing Home Sales slipped in December, blamed on falling affordability. But the National Association of Realtors noted, “expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.” Realtor.com reports that 2022 ended with listings up nearly 55% versus a year ago, homes selling faster compared to 2019 pre-pandemic levels, and home price growth in single-digit territory for the first time in 12 months. Zillow reports that, with conforming loan limits going up to $1,089,300 in high-cost counties, more than 2 million homes nationwide no longer need jumbo financing, which often comes with higher credit criteria and fees. The Mortgage Bankers Association CEO said he expects mortgage rates to move lower over the course of the year, as the Fed’s rate hikes have started to cool down the economy. That should bring more buyers back to the market. Freddie Mac notes: “While mortgage rates have resumed their decline, the market remains hypersensitive…. Over the last few weeks latent demand has been on display with buyers jumping in and out of the market as rates move.” Freddie Mac: “inflationary pressures are easing and should lead to lower mortgage rates in 2023.” Then, “a strong job market and a large demographic tailwind of Millennial renters will provide support to the purchase market.” Freddie Mac’s Chief Economist noted, “Rates are at their lowest level since September of last year, boosting both homebuyer demand and homebuilder sentiment,” adding “declining rates are providing a much-needed boost to the housing market.” The feeling on Wall Street still is that the Fed will ease up on raising rates. Forecasts call for quarter percent hikes the next two meetings, then no hike in May.
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