AUSTIN (KXAN) – About a third of all homes listed for sale in the Austin metro last month fell in price, 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 percentage of listings with price reductions.
Austin was second in the country with a 32.4% decrease in listing prices in June. Only Reno, Nevada, ranks higher at 32.6%.
“This is another example of our market stabilizing after the fever-pitch we were at during the pandemic,” said Austin Board of Realtors (ABoR) President-Elect Ashley Jackson.
Austin is the only city in Texas to appear in the top 10 areas with the highest percentage of price reductions.
“There have been more price cuts recently than we’ve seen in the last few years,” Jackson said. “This is to be expected as the market slows down from the intensity we have seen over the last few years. Sellers are competing with each other to attract buyers and as they do so, they may be forced to lower their prices.
Preston Sauls, an associate broker at Legacy Real Estate Group in Austin, says he finds a lot of listings are still priced the same if the market doesn’t change.
“Many of these listings sitting on the market could have easily sold for their original listing price when the market was more active, when the keywords ‘bounced back,'” Sauls said. “In most cases, sellers are naively thinking that they can still sell their property ‘as is’ for top dollar, and the honest truth is that thinking leads to price reductions.”
Despite the price cuts, the median home price in Austin set a new record in June at $537,475, according to the ABoR. That’s a 13% year-over-year increase.
But in the group’s Central Texas Housing Market Report for June, there were signs that Austin’s housing market is cooling and returning to pre-pandemic activity.
The number of residential home sales fell 20.3% year over year in June. Meanwhile, the dollar volume of sales for the month fell 9.9% to just $2.3 billion.
“The price cut data is a good indication that we are now moving towards a more stable market. However, we have only been here for two or so months and it may be too early to confirm,” Salse said. “We’ll likely see this trend continue as we move through the recession, though it’s 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 down the Austin housing market, but we saw what happened once COVID hit.”
Home buyers have more options. The number of homes on the market jumped more than 200% year-over-year, to 7,090 active listings in June. This led to an increase in housing inventory from 1.5 months in June 2021 to 2.1 months this year.
According to Jackson, this is still well below the 6-month inventories that the ABoR considers a “balanced market”.
The average home has been on the market for a while: the average is now 18 days, compared to 13 in June 2021, but that’s still down from the average of 44 days in June 2020.
“Buyers have more options now, and our high inventory levels mean that buyers can take their time shopping and be a little more selective about the home they make an offer on,” Jackson said. “Sellers want to make sure they work with a Realtor to price their home for current market conditions.”
Both Jackson and Salse suggest that sellers should make sure their home is move-in ready, staged, and appealing to buyers.
“I think we’re seeing sellers cut their prices because they’re basically listing with the mindset that they’re still in the spring market and that’s been gone for a while,” Sauls said. “The most influential piece of advice I’ve received in the last month in terms of talking to sellers is for them to understand that we live in the future. If you chart where the market is today, there’s a good chance you’ll be chasing the market in the coming weeks.
And advice to buyers? If you’ve given up in the last few years, contact a Realtor and start your home search anew.
“There’s never been a better time to enter the Austin market!” Jackson said.
“I think 2020 will set a new level of expectations from the public about what the housing market should look like,” Sauls said. “Any agent can tell you time and time again, 2021 was not Common, and I think people constantly forget that.