Austin Market Update – August 2023 – Goldman Sachs Forecast Revisited

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Austin Market Update – August 2023 – Goldman Sachs Forecast Revisited

Remember back in January when that Goldman Sachs forecast got a lot of attention with their warning that prices in 4 US cities, Austin being one of them, could see “boom-and-bust declines of more than 25%”?

I provided some background on that forecast and how they might have arrived at that number back in my February newsletter market update, which you can review here.  I thought it would be interesting to check the numbers and see how things are going so far in 2023.

When I looked at things back in February, the 2022 median sold price had skyrocketed to 650K for Austin (note: my numbers will not match up exactly with ABOR’s reports).  Based on a historical rate of appreciation, it should have been closer to 480K.  For the median sold price to be back in line with historical rates, it would require a drop of around 26%… so that seemed to be the angle that the Goldman Sachs report was taking.

So now, with 7 months of 2023 in the books, I wanted to compare our year-to-date median sold price with where we would be with the historical rate of appreciation.  Based on that rate, we should be hitting an overall median sold price in Austin of ~507K for 2023 full-year.  In 2023 YTD, though, we are at 614K.  That number is a decline of 5.5% vs. 2022, but is still 21% higher than where the historical rate suggests we would be.

It is no surprise that prices have begun to come down some, particularly as interest rates have risen.  But it will take some time to see whether prices come down like Goldman Sachs forecasted, or if Austin manages to be resilient and hold on to some of this extraordinary recent appreciation.

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