Austin’s cooling housing market reflects national trend: Report
During the pandemic, Austin, Texas, was one of the places to be. It was a magnet for movers chasing space, sunshine and new beginnings. Home prices soared as demand exploded. But now, the script has flipped: reports show the frenzy has faded, and the once red-hot market is cooling fast.
In Austin, there are more homes for sale than there are buyers, so buyers now have more options and negotiating power. Prices aren’t rising rapidly anymore — in fact, they may be falling. More houses are staying on the market longer, which suggests slower demand.
According to Redfin, in September, far more people across the country were trying to sell homes than buy them — about 36.7% more sellers than buyers.
In Austin, sellers outnumbered buyers by 130%.
A similar imbalance exists in cities such as Nashville, Tennessee; Fort Lauderdale, West Palm Beach and Miami, Florida; and Houston and San Antonio, Texas. Eight out of the 10 locations where buyers currently have the most negotiating power are in two states: Texas and Florida.
Home prices have dropped from the record highs they hit during the boom. Since prices are coming down and competition isn’t as fierce, it’s becoming easier for buyers to afford homes again.
A more balanced market nationwide
Across the U.S., the housing market has become more balanced between buyers and sellers. According to Realtor.com, the U.S. now has five months of supply for the first time in nearly a decade.
As a result, sellers must compete for buyers’ attention, which means they might need to lower prices, offer incentives or make their listings more attractive.
For buyers, this shift is good news as they have more homes to choose from. Buyers can negotiate better deals, and they may finally have a chance to buy in a market that felt too expensive or too competitive during the housing boom.
“It’s a good time to buy if you feel confident in your financial situation and you’re planning to stay in your house for a long time,” Redfin Premier real estate agent Andrew Vallejo told Redfin. “Sellers are offering to pay buyers’ closing costs, and the market has slowed to the point where the unique neighborhood with great schools that felt unattainable a couple years ago may now be within reach.”
Buyers hesitate, sellers pull back
Some potential buyers are hesitating, according to Redfin, possibly because they’re unsure whether prices or mortgage rates will drop further. Some buyers feel overwhelmed by the number of choices, which makes it hard for them to commit to purchasing a home.
Redfin points out that some homeowners who were thinking about selling are now backing off because the market isn’t favorable. Since there aren’t many buyers and the ones who are shopping can negotiate lower prices or better terms, sellers feel they won’t get the price they want.
Areas with lots of new construction, including Texas and Florida, have extra housing supply, which makes the imbalance even stronger in those markets. Even with some sellers pulling back, there are still too many homes for sale compared to the number of buyers, keeping places like Florida and Texas firmly in buyer’s market territory.
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Ella Rae Greene, Editor In Chief
