Austin housing market to possibly see relief in 2024

Austin housing market to possibly see relief in 2024

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Heavy rush hour traffic on the highway near Austin, Texas.

Heavy rush hour traffic on the highway near Austin, Texas.

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Buying and finding an affordable house in Central Texas has been hard to come by this year. But realty experts are saying Austin could see a turning point in the housing market in 2024. 

KVUE and Newsweek are reporting that Central Texas realtors predict home prices will continue to fall into the new year as sellers try to come to terms with buyers who are interested in purchasing homes yet struggle to meet the prices due to high interest rates. It’s a simple supply and demand game. 

The demand and supply for Austin realty is high, but the high prices are keeping people away, which means sellers will have to adjust to lower their prices. Brad Case, a chief economist at real estate developer Middleburg Communities, told Newsweek, “If you are a homeowner in Austin, you were really happy when house prices were going up so sharply because of the added demand,” Case said. “Then the new supply came in, and now you’re looking at the possibility of having to take, not necessarily a lower price than you paid when you bought, but certainly a lower price than if you had sold a year ago.”

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Case added there is an oversupply problem in Austin which is why inventory in the area is rising, but despite higher rates, homes are still selling, according to Clare Losey, a housing economist for the Austin Board of Realtors. Losey told KVUE there was a 0.2% increase in sales this November compared to last year and she’s hopeful that nationwide interest rates may fall next year. 

“The Federal Reserve has announced that essentially its rate hiking cycle is over,” Losey said.

Austin’s housing market is above pre-pandemic levels and has defied trends across the country, with the city seeing a steady population growth of 5% between 2020 and 2022, according to Newsweek. However, prices are 55% above where they were in 2019, Hannah Jones, an economic research analyst at realtor.com, told Newsweek.

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Realtor.com expects home prices in Austin to come down by 12% next year, and to decrease 2% overall across the country. Mortgage rates are also expected to decline next year, which could give prospective buyers not only more buying power but some relief when it comes to their monthly payments. Plus, growing cities like Austin will continue to be a popular place for people to move to in 2024, no matter the price in some cases. 

“I don’t think that is going to reduce the appeal of a place like Austin for potential migrants. They will still want to live there,” Case said to Newsweek. “It’s just the people who bought houses there or buy houses in the next few months may find themselves, not necessarily underwater on their mortgage, but certainly with an asset that’s worth worth less than when they bought it.”

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