Austin's Real Estate Market: A Dive into the Current Dynamics
Ever wondered about the current pulse of Austin's real estate? Well, to put it lightly, it feels like the polar opposite of the weather outside. Think of the freeze earlier this year or Snowvid storm of 2021 but without all of the broken branches, and without losing power and water. But before you wrap your head around that, let's dish out some figures.
Home sales have cooled down by 23% in the first half of this year. The only thing that seems to be hot and happening? New construction sales.
The Age-Old Refrain: Rising Interest Rates
Now, you might be thinking, "Haven't we heard this before?" Well, sorta. But the devil, as they say, is in the details.
Let's talk numbers, shall we? Mortgage rates have skyrocketed to a whopping 7.19% this week. So, what does this mean for our aspiring homeowners?
Higher Monthly Payments: Take a house with a $300,000 loan. Buyers will now cough up an extra $330 per month compared to just last year. Ouch, right?
Sellers on a Break: Many homeowners who refinanced their mortgages in the past three years are now lounging in their backyards thinking, "Why swap a cozy 3% mortgage for a chilly 7%?"
The Silver Lining: New Construction
Alright, it's not all doom and gloom. Let's address the "kinda" I teased earlier. There's one bright spot in the market: new home sales, which have soared by 31%. Why this surge?
Friendly Prices: Over the past year, materials for new constructions became somewhat of a bargain hunter's dream – especially our dear friend, lumber.
Smaller, Yet Sweeter: Builders, being the innovators they are, started rolling out smaller home designs, leading to more affordable price tags. To give you an idea, homes under $300,000 have made a comeback in Austin’s vicinity. Talk about a throwback!
A Taste of Modern Compact Living:
Over in Del Valle, there’s a pristine 1,440 square foot home ready for you at $292,900.
In Bastrop, a cozy 4bd/2ba 1,849 square foot property is up for grabs at $274,900.
In Jarrell, you'll find quaint homes ranging from 1,230 to 1,266 square feet, priced between $213,990 and $253,990.
The Crystal Ball: Future of Mortgage Rates
Let's play fortune teller for a moment. On August 13, 2023, Lance Lambert from Fortune brought out insights from eight big-shot research firms, all attempting to predict the unpredictable: future mortgage rates. Here’s the rundown:
Mortgage Bankers Association: Sees a dip to 4.9% by Q4 2024.
Morningstar: Expects rates hovering around 5.0% in 2024, cooling to 4% in 2025.
Goldman Sachs, Realtor.com, Fannie Mae: All foresee averages between 5.9% to 6.1% for 2024.
Remember, predicting rates is like herding cats: tricky. But it's always good to stay informed!
The Road Ahead
Between now and year-end, cash investors will be on the prowl for prime properties. For the eagle-eyed buyer, bargains will pop up, and for sellers looking to seal the deal, presentation is key. Think stellar homes, jaw-dropping curb appeal, and show-stopping interiors.
“I serve people before I sell property.”
If selling is on your mind, especially due to unforeseen circumstances, reach out. I've been on a roll, with four homes sold in just two weeks. Yep, I've been hustling hard, but it's all for you. Drop a line at ivy.stanton@exprealty.com, give me a ring at 503-781-0206 or click here to connect.