I am looking for leading indicators of what might be happening in the Austin market, and one approach I took this month was to look at the number of transactions that sold for less than the original asking price. I looked at May of 2022 closed sales compared with May 2021, which indicates that there were more price reductions occurring this year vs. last year.
Keep in mind that sales that closed in May are based on contracts executed in April, so May sales are more of a reflection of market dynamics in April. The best I could do for more up to the minute insights to the market is to look at pending and active listings as of right now:
The caveat here is that pending listings may actually transact for less than the last asking price, so price reductions are potentially understated as we don’t yet know what those homes sold for. We can also see that for active listings, over 30% have had price reductions of some kind, though I don’t have a comparable metric for a prior time period so it is difficult to create a narrative from that data point.
Overall new listings in May were 10% higher than May ’21, but year to date listings are still lagging 2021 by about -2%, though they were up 10% in May compared to May ’21.
This is driven primarily by far fewer listings in the lower price points. Listings priced under 750K are lagging 2021 by -18% this year, and were down -12% in May.
Homes priced over 750K, reflecting the enormous appreciation in the Austin area market in the last 12 months, are well above the 2021 numbers, up 26% year to date, and up a whopping 48% in May ’22 vs. May ’21!
Transactions overall year to date are lagging 2021 by a little over -6.5%. The year so far has largely tracked 2019 and 2021, but beginning in mid-May things started to depart the historical trend, indicating some kind of shift in buyer activity in mid-April.
Remember that real estate is hyper-local. What is going on elsewhere in the country, the state, or even the city may not be an accurate reflection of the real estate market in your neighborhood. If you are curious about the market value of your home, or would like to develop a plan for listing your home, please allow me to help!
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