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As we make our way down from the stratospheric real estate conditions of the last two years, I’m paying attention to fundamental market indicators and feel comfortable saying a smooth landing is in store for the Austin area residential market. Here’s why:
A LITTLE AUSTIN HISTORY
The last time Austin was in a downturn we saw the total sales decline by ~20% from 2007 to 2008 and reached the low mark in 2010 with a ~29% decline. The declining sales directly contributed to an increase in the amount of inventory available. At that pre-recession time period, the inventory hovered around 3.8 months (seller’s market) and it pushed north of 6 months of Inventory in 2009 and 2010, which is firmly a buyer’s market.
IT’S NOT LIKE LAST TIME
There hasn’t been anything “normal” about the last two years or the conditions leading up to this downturn. The primary culprit of today’s shift is inflation. During the last downturn we had to clean up a broken financial lending system. There is a great deal of optimism that we can address inflation in a timely fashion, interest rates will stabilize, and buyers feel comfortable jumping into the market (sooner than last time).
SUPPLY IS STILL LOW
Another difference between 2007 and today is supply. As a nation, and specifically in Austin, inventory is still low. Prices pushed up quickly and homes were still selling fast…but rising prices coupled with rising rates FINALLY pushed affordability over the edge. We’re seeing builders and sellers respond quickly with price reductions which offset rate increases and keep sales moving.
MILLENNIAL DEMAND IS UP
The number of new homebuyers is at an all-time high. Americans who are either Millennial-aged or younger make up half of the U.S. population, roughly 166 million. This is significant because first-time homebuyers represent the largest share (31%) of people purchasing homes, according to data from the National Association of Realtors (NAR).
While we can’t say exactly how long or how sharp this descent will be, Austin is well-positioned for a smooth landing.
We have a growing population, a large talent pool, numerous corporate relocations/expansions, and low unemployment.
It’s still a GREAT time to sell as prices are near the all-time peak.
For buyers, you now have an opportunity to jump in…there’s more to choose from and price improvements are helping to off-set the cost of higher rates.
Call me at 512-809-5495 to talk about your next MOVE!
SHADY VILLA HOTEL
When I first moved to Austin, I visited the Stagecoach Inn in Salado for lunch. We sipped sweet tea and ate their legendary hush puppies. HUSH PUPPY RECIPE
A lot has changed since then, and the historic Stagecoach Inn has recently undergone a second renovation. This time Bunkhouse was tapped with shepherding this legendary property’s future. STAYCATION
LEATHER AND VODKA
PREMIUM CUSTOM LEATHER
Rolling in Thyme and Dough is Dripping Spring’s European Bakery, Cafe and Coffee House! My favorite thing on the menu is a savory breakfast croissant with meat, egg, pesto & provolone cheese…but honestly you can’t go wrong here. The pies, cakes and cookies are homemade and you can taste the love in every bite! MENU
AUSTIN AREA MARKET STATS:For those who love a good spreadsheet, here are the latest Austin market stat. JUNE 2022 REPORTS HERE
BUYER GUIDE: It’s not easy buying in a market with rising prices and limited inventory. We can help you through the process. BUYER GUIDE
SELLER GUIDE: How do you make sure you get the most money for your home? From pricing to marketing, we’ll customize a plan to ensure you get the most money for your home. SELLER GUIDE
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The information contained herein does not purport to be complete nor, necessarily, accurate and should be independently verified; nor does it represent or constitute a legal analysis or financial advice. All of the financial projections and/or conclusions are provided for illustration purposes only. Compass and its agents disclaim any and all liability for representations and warranties, express or implied, contained in, or for omissions from, the information contained herein or any other written or oral communication transmitted or made available to the recipient. This represents an estimated sale price for this property. It is not the same as an opinion of value in an appraisal developed by a licensed appraiser under the Uniform Standards of Professional Appraisal Practice.