Austin's Summer Sizzle: The 2023 Housing Market Update
Ah, summer in Austin. While the city buzzes with BBQs, festivals, and live music, there's another kind of heat rising, and it’s not just from the Texas sun. We're talking about the Austin real estate scene! As we delve into the summer months, let's explore what 2023 has in store for both buyers and sellers.
Demand and supply
One constant we observed is the Months of Inventory (MOI). Standing at 3.46 MOI in July 2023, there's hardly any movement from June 2023 and July 2022, both registering 3.4 MOI. This suggests that Austin's inventory remains steady. Interestingly, there's a slight drop of -6.14% YOY in units sold. However, this is the smallest dip since the gradual slowdown in the market.
The month-over-month average and median sold prices showed a moderate drop, with July witnessing the first such decrease since February. This can be attributed to typical market seasonality, pointing to a market that's finding its balance. YOY pending units shot up considerably for two consecutive months, at +15.19% for the Metro and +14.03% for the City. This hints that sold units might see an upward trajectory in the upcoming months.
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The anticipation of improved mortgage rates due to moderating inflation has been dashed; current market conditions confirm they're staying elevated for the foreseeable future. Despite indications like the Federal Reserve’s favored inflation metric, Personal Consumption Expenditures, showing a positive trend, the bond market's focus on the surging labor market has overshadowed such factors. With evident disagreements among Federal Reserve officials and Mark Sprague, our go-to guru for all things Mortgage - his track record shows over the years that we should brace for a 25 basis point rate hike come July 26, and possibly another in the following months.
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What does this mean for you?
For Buyers: With interest rates soaring, 2023 emerges as a golden opportunity for purchasing. Taking the plunge now could bring contentment in the coming 1-2 years. A potential strategy could be to buy at the current lowered prices and consider refinancing the mortgage later on.
For Sellers: The key to a successful sale in the current market is realistic pricing. In an average market, prices drop to lure buyers during the slower seasons. In our current slower-paced market, this becomes even more vital. If selling this year isn't a necessity, waiting for 2024 might be a better option.
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