Austin Real Estate Market Update: September 20 2024

The Austin real estate market is currently in a period of transition. As of September 2024, the Months of Inventory (MOI) stands at 5.2 months, signaling a neutral market. This metric is a key indicator in real estate, measuring how long it would take for all current listings to sell if no new properties were added. An MOI below 4.9 months indicates a seller’s market, while more than 7 months suggests a buyer’s market. At 5.2 months, the Austin market is balanced, giving both buyers and sellers some leverage, but not tipping heavily in favor of either.

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In addition to the MOI data, there are currently 15,114 active residential listings in the Austin area. This is down from a recent peak of slightly over 16,000 just a few months ago. This drop in active listings could indicate a slight tightening of inventory. Fewer homes available on the market can lead to more competition among buyers, but it is important to note that inventory levels are still higher than during the housing boom of 2020 and 2021, when active listings were at historic lows. The drop in listings from over 16,000 to 15,114 shows a trend that could impact how quickly homes sell and at what price point they move.

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The Months of Inventory data shows a significant shift from just a few years ago. During the pandemic years, when buyer demand surged due to low-interest rates and shifting housing needs, the MOI dropped to as low as 1.0 month in early 2021. At that time, the market was extremely competitive, with multiple offers and homes selling well above asking prices. In contrast, today’s MOI of 5.2 months reflects a more measured pace of buying and selling. Buyers have more options and can take more time to make decisions, while sellers may need to be more strategic about pricing.

Although the current market is neutral, it is still important for buyers and sellers to understand the underlying trends. Interest rates are higher now compared to the historically low rates seen in 2020 and 2021. This increase in borrowing costs has cooled buyer enthusiasm somewhat, leading to more stable market conditions. However, Austin’s desirability as a place to live continues to drive demand, particularly as the market stabilizes from the rapid growth of recent years.

Sellers should be aware that while the market is no longer as frenzied as it was during the housing boom, homes are still selling. With 15,114 active listings, there is enough inventory for buyers to choose from, but not so much that it overwhelms the market. Pricing homes competitively will be essential to attracting attention and offers. Sellers might also expect properties to stay on the market longer compared to the rapid sales seen in the past two years.

Buyers, on the other hand, can benefit from the neutral market conditions. With the number of active listings and a stable MOI, buyers have the opportunity to negotiate more favorable terms than they would have in a strong seller’s market. However, they should still be mindful of rising interest rates, which could affect their buying power. Waiting too long for prices to drop further could mean missing out on favorable financing terms.

Overall, the Austin real estate market is finding its balance. The shift from the extreme seller’s market of the pandemic years to today’s neutral conditions is a sign of stabilization. With 5.2 months of inventory and 15,114 active listings, the market is well positioned for both buyers and sellers to make informed decisions. Monitoring these trends will be essential as the market continues to evolve throughout the rest of 2024.