For decades, Austin, Texas, was often referred to as “the hottest” housing market, bolstered by an influx of tech companies and the ensuing migration of their employees.
According to a new report from technology-powered real estate brokerage Redfin, that’s not the case now.
Redfin said that the typical home that went under contract in Austin in December spent 106 days on the market. That’s up from 91 days a year earlier and was the slowest December in records dating back to 2012.
Redfin reported that unsustainable price growth in recent years along with a homebuilding boom have left Austin with more sellers than buyers. Buyers who are in the market can take their time and negotiate.
“Homebuyers in Austin have the luxury of time and bargaining power,” said local Redfin Premier Real Estate Agent Andrew Vallejo. “I have a buyer who just offered $560,000 for a home that was listed at $599,000 and a few years ago would’ve been worth $700,000. There’s a pretty good chance the seller will say yes, given how slow the market is. Another buyer I’m working with also made an offer on a house for below the list price and plans to bid on a different home if the seller doesn’t accept.”
Nationwide, Redfin said, the typical home that went under contract in December did so in 60 days, up from 54 days a year earlier.
December-to-December Data Analyzed
Seattle-based Redfin said its report is based on its analysis of MLS data, comparing this December to past Decembers because the data is seasonal.
Redfin noted that Austin was the slowest market among the 50 most-populous metropolitan areas. Tied for second place were San Antonio, Texas, and Fort Lauderdale, Florida, where the typical home that went under contract in December spent 99 days on the market.
Next was Miami, Florida, at 92 days, and West Palm Beach, Florida at 87 days.
Redfin said that Austin’s slowdown marks a sharp reversal from recent years, when the city often held the title of “hottest” housing market.
Austin, the state’s capital city, regularly ranked among the fastest markets from 2014-2016, with homes selling in as few as two weeks.
The city’s housing market again boomed during the pandemic, when Austin saw the fastest home-price growth in the nation as scores of affluent remote workers moved in from out of town. That caused the Austin market to overheat, Redfin said, which is one reason it’s now slowing.
Texas, Florida Housing Markets Have Slowed
Austin’s median home sale price dropped 4.2% year over year in December—the third largest decline among the top 50 metros, Redfin said. Many sellers are taking losses, it reported.
Housing markets across Texas and Florida also slowed in recent years because of a homebuilding boom. With more options to choose from, Redfin said buyers feel they can take their time. Austin, it said, had an estimated 128% more home sellers than buyers in December—the largest imbalance among the top 50 metros.
While Austin’s market has shifted in buyers’ favor, Redfin said many house hunters are still waiting on the sidelines. Many prospective buyers plan to continue renting until they see mortgage rates fall to the low 5% range, Vallejo said.
“One of my buyers just purchased the home they had been renting, and their monthly payment is going to jump from $2,900 to $6,500 because now they have to pay for mortgage interest, taxes, and insurance,” Vallejo said. “They love the property, which is why they bought it, but they’re outliers—most people aren’t willing to take on such a high payment when they can rent for much less.”
The post Once Among the Nation’s Hottest Housing Markets, Austin Is Now the Slowest first appeared on The MortgagePoint.
