We ran First Look Statistics for the month of Sep 2023, which are available below. Prices remain stable, but the +0.5% increase in mortgage rates caused slightly less demand than was to be expected. The question remains, “When will the Fed ease up so the recovery can begin?”
Months of Inventory (MOI) in the Metro and City edged up to 4.1 but remain in “balanced market” territory.
Total sales decreased by -23.4% YOY, which was unexpected and seemingly unexplained.
Year Over Year (YOY) Avg and Median Sold Price saw minimal changes at -1.8% and -4.5% in the Metro.
Month Over Month (MOM) Avg and Median Sold Price were almost completely flat.
Indeed.com Job Postings remain sluggish with -27.35% YOY change.
Median & Average Sold Prices Remain Stable
Both Med and Avg Sold Prices saw minimal declines from August, but remain lower than the late spring / early summer highs. Austin’s market is consistently seasonal and we typically see motivated sellers take lower prices in the fall winter while less motivated sellers withdraw their listings and try again in the spring.
Mortgage Rates Increase Mortgage rates increased by roughly 0.5% in September, which was somewhat unexpected. The Fed did not raise rates at the Sep meeting, but indicated a more hawkish stance than expectations. The bond market and 10-year treasury note both put upward pressure on mortgage rates. Combined, this caused mortgage rates to increase by roughly 0.5%.
Pending units declined slightly more than expected, likely as a result of increased mortgage rates. The 2023 pending unit trend line has followed the normal seasonality of 2019 up to this point, but in September, units decreased more on a MOM basis than in previous months. If this continues, we will have a slower fall and winter market than the already slow fall/winter we always expect.
The big question is “When will the Fed ease up?”
It’s no surprise that the Fed monetary policy impacts the real estate market, but it can be surprising just how effectively it affects it (and affects all markets). All eyes are on the Fed and we can reliably expect Austin’s job market and real estate market to react positively when they begin to loosen monetary policy. Right now, expectations are that the Fed will begin to ease in June 2024.
If you’re a buyer
Our advice to buyers has been consistent throughout 2023 and it doesn’t change now. This is a strong buying opportunity if it makes sense for you to buy. Rates are high, but prices are lower than you will likely see again in Austin. You can buy now and refinance later and ultimately accomplish a lower monthly payment than you will be able to in the future.
If you’re a seller
If you’re currently on the market, it’s important to identify your “Plan B”. The real estate market goes into hibernation over the winter and demand is already sluggish. Pricing in 2023 is critical if you must sell in 2023. Otherwise, you can expect a better market in the spring of 2024, the only question being, “How much better?”
As always, real estate is hyperlocal and hyper-situational, so please reach out to us to discuss your specific situation. We’d love to help you and strategize what’s in your best interest!