Austin Market Update – September 2023

By in Blog Posts with 0 Comments

Austin Market Update – September 2023

Last month I highlighted that the number of new pending transactions in June and July, though far behind 2019-2021, did exceed 2022 numbers and perhaps indicated an improvement in market conditions.  To be clear, pendings were still declining each month after peaking in April but were not dropping at the same rate they had in 2022.

In August, the month-on-month downward trend continued, down over 11% vs. July, but also due to a bump in activity in August 2022, the year-on-year activity was down roughly 5%.

Looking at weekly pendings data for 2023 graphed against the 30-yr mortgage rate, you can see that starting around the middle of July (wk 29) the mortgage rate started a steady climb from 6.78% up to a peak of 7.23% in mid-August (wk 34), and at the same time new pendings went on a steady decline.  There was a spike the week before the Labor Day weekend which could be attributed to the decline in rates, or activity moving up to get done before the end of the month or the holiday weekend, or probably a combination of all those things.

The number of new listings dropped ~5% from July to August but was only down about 1.5% vs. 2022.  July’s low number of new listings relative to prior years stands out more than August.  August has always been the low number of the summer, so not anything unique from a trend perspective.

For my months-of-inventory chart, I have removed the $5M+ price point because it distorts my graph too much.  Suffice to say there are many years of inventory in the 5M+ price points.  For the rest, though, lower price points below 1.25M indicate a very healthy market with 3-4 months of inventory.  Higher price points begin to creep up and range from 5-10 months.

Lastly, looking at price appreciation you can see that year-on-year appreciation is gradually creeping back up to zero.  According to MLS, homes sold for roughly 95% of their original list price in August (overall), though the higher price points ($1M+) were more like 93%.

The median sold price in August was 620K, which was down slightly from July and down a little less than 1% vs. August 2022.  The median sold price trend line is very close to the 2021 trend line, so it will be interesting to see if it follows that and we see the median sold price continue to decline (from a 2023 high of 644K and an all-time high of 730K in May of 2022).

If you missed last month’s update and want to see my updated analysis of the Goldman Sachs prediction that Austin would see a boom-to-bust decline of 25%, click here.

Lastly, I saw a Wall Street Journal article right before my newsletter went out on Saturday, September 9th that included the following quote about the real estate market: “Prices are still down on a year-over-year basis in 14 of the country’s 50 biggest markets, led by Austin, where prices fell 11.9% in August from a year earlier, according to Black Knight.”  This is not consistent with the MLS data I have, and may be a misquote or error in the article.  They may have meant July, as that is fairly consistent with the data I have for July.  I’ll update this article if I get new information.

Share This
About The Author