Austin Housing Market - 2022 Shift Coming
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- Опубліковано 23 вер 2024
- The Austin housing market is on track to become the most unaffordable market outside of California. Last month , the median sales price for the entire five county Austin metro hit $500,000, and in the city of Austin, the median price was $565,000.
One of the major reasons for this rapid increase in home prices is buyer competition. Multiple offers have become the norm and most home sell for more than the list price. Inflation and rising mortgage could reduce that buyer competition because there will be some buyers who will be priced out.
If you’re sitting on the sidelines, you could miss the shift. It’s not a question of whether it comes. It’s a question of when it will come and what opportunities it will create.
Charles Lewis is a REALTOR® in the Austin area. He helps people all over the greater metro area buy and sell houses. Schedule a no-obligation phone call to find out how he can help you accomplish your real estate goals: bit.ly/ATXPhone
Charles Lewis
Keller Williams Realty
call/text: (512) 592-0938
email: charles.lewis@kw.com
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In Austin, what are odds we see declining market?
If you asked 10 people that question you would get 10 different answers and regardless of what their position or credentials, no one really knows with certainty.
The bad news is the Federal Reserve is talking about a “housing bubble.” If they’re talking about it, then it’s probably already happened.
Over the last 18 months there has been news story after news story attempting to explain what’s happening. How many times have you heard something like this, “It’s basic supply and demand. There just aren’t enough houses. We need to build more.”
What if I showed you reporting that the percentage of houses in the United States, both per capita and per working age adult is slightly higher than it was in 2007? In other words, there are enough houses out there for the current population. The problem is there are too many people who own multiple houses, and right now - they’re not willing to sell them.
Remember that an investor will sell for different reasons than a homeowner, especially if that investor’s strategy is more short-term or speculative. In some areas of the Austin metro, the property tax rate is close to 3% and since an investment home would not be a homestead, there is no limit to how fast the taxes can be increased year-over-year. They can try to recapture it with increased rents, but there are limits to what the market will pay.
I say all this because there are a lot of investment properties in the Austin metro. This was true before the price runups and appears to have accelerated during. I had a client take possession of a home in a new build community about nine months ago and within the first six months, approximately 80% of the houses on the street were listed for rent. And yes, this builder had a “no investor” policy.
If those investors get spooked, decide to cash in their gains, and/or find other investments with better returns (multi-family or commercial,) we could see enough listings to stabilize pricing. If they did it en masse (like a stock market sell-off) we could see a crash, and nobody in Texas has seen one of those since the 1980’s.
Thanks for your question. Writing this response helped me clarify the intro to the video I’m planning to do this week.
It will all filter itself out
Thanks for sharing your thoughts. That's a valid point. In two more years, we'll be talking about what happened starting in early 2022.
Why didn't the Austin Board of Realtors and realtors in general sound the the alarm, that corporations where coming to Central Texas with bags of cash, offering 100's of thousands in some cases over asking prices? Untimely driving up and inflating our market. This seems like a ethics violations on the part of your industry. Did realtors in Austin place profits over sounding the alarms of these deceptive practices by Wall Street?
Thank you for your comment. First of all, it’s not possible for any individual or group of individuals to understand what’s going on until after it’s happened. What that process looks like is sales data is analyzed to uncover patterns and trends. At that point, it’s theory and opinion to provide an explanation. Even though those theories and opinions might be widely accepted, they could be proven 100% wrong after additional data is added to the analysis.
If you’re position is that it’s “unethical” for an individual or corporation to purchase something for whatever price they’re willing to pay, or that it’s “unethical” for a seller to accept more money than they were expecting, or that the real estate professionals (who are not parties to the transaction) are somehow responsible for the financial decisions made by the parties to the transaction, I’m not sure there is much I can say to counter that. Frankly, because my understanding of the word “ethical” has more to do with moral values as opposed to financial transactions.
If a buyer is willing (and able) to pay $100k more than a house is listed for, I would venture to say that both parties are going to view that transaction as a win/win. They both would be happy with the result. There was no deception or withholding pertinent information so that either party had some kind of advantage over the other.
I think the real “problem” we’re all coming to terms with is we are a very rich country. Something like $8 trillion dollars in untapped home equity and another $12 trillion dollars in IRA and retirement accounts. If just a portion of that money was used to purchase real estate, it could upend markets across the United States. When you add high household incomes, venture capital funds, federal stimulus money and historically low interest rates, you would have many of the ingredients which caused the price runups over the last two years.
As it begins to shift, I think the question we should be asking is what happens next?
Sir, why are you green ?
The color adjustments were off. Contrast/saturation set too high.
@@SFSCharles otherwise than that, great content, appreciate your insights
Thanks for watching the video and thanks for the comment. I think I might stop shooting with the red shirt. That might be a part of that color problem.
Don't make him angry.... You won't like him when he's angry!