The Austin TX Housing Market is in BIG Trouble
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- เผยแพร่เมื่อ 1 มิ.ย. 2024
- Trouble is brewing big time in the Austin, Texas housing market. The amount of homes for sale this April skyrocketed to at least a 7-year high (i.e. higher than any other month since at least January 2017 per ResiClub Analytics). This is wild given the fact that inventory tends to peak in the summer months, not early Spring in the Austin Texas real estate market. Inventory is surging due to declining demand and a significant rise in the number of new listings. According to data from Redfin for the four weeks ended May 5, 2024, new listings increased to at least a 3-year high (during the same time period) and up 13% year-over-year. However, despite this rise in new inventory in Austin Texas, pending home sales fell to a 3-year LOW for that same time frame (and decreased 6% YOY). Additionally, the share of price reductions rose to at least a 5 year high as well for the first week of May each year.
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Source of reports I shared:
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To give you a quick mortgage interest rates update, according to the Mortgage News Daily the average 30 yr fixed mortgage rate is around 7.2% for the current mortgage rates (at the time of filming this video for those with excellent credit).
Comment below: what’s your housing market forecast? Do you think a housing crash will happen or are your housing market predictions that the real estate market and home prices will continue to surge?
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Austin/Roundrock area used to be a great place to move to. Those days are over. Sad.
Hopefully this bring down the house prices in Austin. A lot of these houses are way overpriced!
What I have noticed covering San Antonio is that there are areas where building is very over saturated but are areas that locals wouldn’t be interested in. Builders were banking on out of town migration which surged in 2020-2021 but slowed considerably. I just covered how an institutional investor bought 28 homes on 1 street in a Lennar new build community, but are now selling 24% 2022 list
Same thing happening in CA. Investors buying blocks of new homes, renting them and 1-2 years later many are for sale 8:27
Speculation is great until it's not.
@@MrTL3wis specDeflation lol
Love Jason's charts and now it will be interesting to see if inventory skyrockets end of summer. First Austin then ....
Homes looks less expensive to Californians but they don't know about the property taxes. Its at least $10,000 per year for a 3000 sqft home. Remember home prices in Austin, TX being in the price range of $90,000's to $150,000's in 2009 and 2010.
Hehehe the cool part is have a 100% disability rating so I don’t pay the property taxes
Austinite here. I think there are waaaay more investors here over the past few years than were reported. Looking for a house in 2021-2022 was insane. Remote, all-cash buyers everywhere. Now they're all trying to flee the sinking ship. This can't be even mostly actual primary dwellings.
The market is still flooded with investors. Too many people building their wealth through housing to stop
Thank you for sharing and please keep us posted.
@@Sonofawildanimal4241 I wonder what happens when they get to the point where it's no longer a big investment, I'm worried about a sell-off stampede. It'll probably be much slower than a stock sell-off.
Do you think calling it a sinking ship is accurate? In my perspective, I’m more relieved that there are finally enough new development communities to bring home prices back to something more reasonable
@@randomtricksvideos I think if you've got skin in the game or are considering buying in, you'd be wise to consider it a weakening investment, if short-medium term gain is your goal. None of the key indicators tell a different story, unfortunately.
I feel the most bad for low income local homeowners who've had their houses for quite some time in Austin who are now facing radically inflated valuations that are driving up their tax bills and making their long-term homes unaffordable. 2-3% tax rates are no joke.
I think, for Austin suburbs, $150/sqft is a fair price. It's heading there, but I fear that the numbers are saying it'll dip perhaps significantly south of that. My personal suspicion is that rampant speculation and subsequent evacuation of the market is the culprit. Builders lag on market trends, which explains the inventory flooding the market now and (being partially to blame for, as you say) pushing down prices.
Again, I feel super bad for those who will likely fall on hard times because of this.
Definitely correct. As a property owner in the Austin area, it is scary. Glad we do not need to sell anytime soon.
The strange thing is there is still a lot of building going on. I suspect some of these are completions of older projects that were started in 2023 or prior boom. They tend to be out to the East and West of the city in formerly rural areas.
Tons of permits pulled, even when the markets were coming down. Totally nuts.
Builders are never nimble. They build until they literally become unprofitable. What choice do they have? If they stop, they cease to exist, and further, if they stop they dump a lot of workers onto the market, creating a recession. That's why builders are such a big part of the boom/bust credit cycle. We are way overdue for a bust of biblical proportions.
Interesting. I like that inventory tracker and hope you show more of it. I am in the Northeast where inventory is still low. Nevertheless, it's nice to see some areas of the country gaining inventory. It gives me hope that things may, at least, return to normal. These past few years have been crazy.
This is just an example of how it just takes a few home owners getting spooked to start an inventory avalanche. Worst case would be a big investor starts cutting holdings.
Spooked? Surely some of that, but there is also a flood of new builds. And a lot of investors/Airbnb-ers who wanted to cash in on the covid bubble...
and a variety of forced sales from people who could not hold off selling any longer. I'd say it's an even mix of all four cohorts.
Great data dive again Jason. Thank you!
Glad it was helpful!
Austin is OVER!
I’m trying to buy my first home in Austin early next year so I’m here for all of this. Finally seeing some decent listings in my price range. 🤞for the rates to come down closer to 5 by then
Hold out for as long as you can
If the rates are still terrible I’ll wait but I’m not trying to time some theoretical bottom in prices. Austin has always held up really well and is the most desirable place to live anywhere close to it
@@petetown13 That's probably the right call. I personally wouldn't buy anything over there over $150/sqft (like up in Pflugerville/Round Rock or Cedar Park) or I'd feel like I was overpaying. Closer to the city would ofc be higher. Best of luck with your search! ❤️
Very detailed report. Thanks. Crime has also become a HUGE problem in Austin. Not to mention pollution and traffic congestion. Austin's "Golden Age" is long past, sadly. Still overpriced by 50-80% in many areas imo.
I think we are going to see a lot more of this going forward 😮
Thank Jason
You bet!
Great data. Thanks! 🫣🫣🫣
Any time!
@@JasonWalter1 I thought ATX was out of the woods. Not so much. 😩
Great video. Very nice summary of many sources to get a good sense what is going on
Glad it was helpful!
Once the smart money starts to leave RE for bonds the cascade will start. He who panics fist panics best. Investor selling will make inventory skyrocket because they add inventory but zero demand. As inventory grows, prices will decline which will encourage more investor selling. Feedback loops are hard to break once established.. that’s why home prices went up over the last two years despite higher rates.. and why prices still crashed from 09-12 despite massive rate cuts.
I’ve covered lately American Homes for Rent and First Key Homes, 2 big institutional investors, moving from buying to now selling at deep discounts. They particularly want out of tx where property taxes soared
This all day
I was wondering about the property taxes, there. They are sooo high! In my state they tend to be lower than a lot of states, so when I was browsing homes in Texas, Ilast year, I knew there was no way I'd be buying anything there. Too rich for my blood! @@REWatchman
History never repeats but it certainly rhymes.
The higher rates go the lower homes go, the lower rates go the higher homes go. Remember 2.8% rates when people needed auctioneers so many people were showing up as soon as a home listed, buying with no appraisal, no inspections, paying as much as 100k OVER asking. We were lucky to have found our house at a great price and great rate, Gave the seller their asking price, we paid for appraisal and inspection, seller paid closing costs and made repairs/ replacements that the inspection found.
Also saturating an area with over building WILL lower values. A lot of builders are building multi family as well as single family as build to rent not build to own.
Wow, thanks for the information. The Texas spring market dies on Memorial Day. Everyone goes on vacation. This doesn’t look good for sellers. We hope to buy our retirement home there but we are not in a hurry.
About to sign a contract on a new construction. Austin prices is much lower compared to where I am now
Austin is a dumpster fire
I was blown away by the stats I shared. It was holding up fairly well after 2022’s correction but looks like trouble ahead.
Austin prices are not going to fall. the inventory may rise. the reason is the transplant remote workers moving into the city added a lot of affluency to the area so they will hold no matter what and you will see this
@@moatmo3752 real estate mind set says otherwise
@@moatmo3752Doesn't look like that, list prices are already down.
@@richiebee33with 7% interest rates that's expected and this is after almost 70% price growth, the only thing that can bring back Austin prices to pre pandemic is recession which seems unlikely
Good Monday morning Jason
Thank you Steve and happy Monday!
TX Real estate has historically been boom/bust for various reasons. Take a look at historical data across the last few DECADES, not just a few years.
Texas, Florida, Phoenix and Vegas are always the big boom/bust towns. But Boise might join the club this time.
Short-term, it is a concern. A few years from now, not a concern at all. By the end of the decade, you’ll look back and wish you bought during the dip (which is now).
Are builders finally listing the houses they have built? These numbers won’t make a difference. We have had plenty of inventory for about a year.
I was there 1 yr. ago looking for homes in the austin suburbs....I'm glad I didn't buy then. There was a cool development with 3d printed homes in Georgetown...I stopped to look at it...they had 2 security guards come up to me, and say I could not take pics or videos.
What is a 3d printed home?
Icon builds them…
Some houses here are depreciating more than 19% from the peak. They’ll go down more imo. Property taxes will also impact depreciation here, they rob you with them.
Tesla layoffs just happened. They haven't hit the market, yet.
Side note, in the Journal today I see Fisker will close for good in June.
At this point the only people buying are the rich competing with themselves.
Good morning
Morning!
Hi Jason, Just back from a conference in Denver a week ago. In the pre-conference Ken McElroys shows Austin is leading new supply( primarily multi-family) for 2024-2025 national waise. But as long term game player, after 2025 there are no new supply. So 2024-2025 in his opinions is the most difficult time for seller or multifamily syndicates with a lot of competition. After that will be seller's market again. Anyways this is a place still affordable and populations/jobs move in. If you are a long term game player this might be the opportunity for you. I have a house near Tesla and the tenant are laid off. I have a great PM help me listed with a right price and get rented out in a week. The jobs in Austin is much better than Phoenix and Orlando I have to say.
Funny - after 2025 will be seller's market? Do you know how many new homes were put up these several years? How Elon or the tech are doing then? If there is a recession, this can be a very long wait for the sellers.
So where’s the best place to move In 2025
Californians realizing that Austin and Texas as a whole sucks. There’s a reason it’s a cheaper, Texas will crash hard.
Ummmm... ok... LOL!
Once they move out of the state,it will no longer suck. 😂😂😂
@@tlindsay1007 Absolutely!
Thank Joey boy for this 🤦🏽♂️
What about Florida
Depends on what part of Florida… generally Florida is holding strong… SWFL’s inventory has an increased significantly, so much so it’s throwing off the inventory numbers for the entire state
@@Sonofawildanimal4241it’s also Jacksonville and the Palm Bay Area that to name a few that are not holding strong.
hot and humid
More inventory is here!! Agents should be happy!!
This would be great news for investors if rates were not 7-9%!!!!
Enjoy the triple digits 🤠☄🔥☄🔥☄🔥☄⛱🔥☄🔥⛱⚡
Hopefully, all the Californians are returning home.
I would appreciate it if you provided your analysis for Utah.
Sell at Vegas, buy at Austin.
Sell in Vegas, rent for two years, buy in Austin.
We just sold in Vegas and are waiting to buy around Austin.
1😊
Good morning!
People moved to Austin thinking it's Texas then realized Austin is just as woke as California.
Don’t listen to the crash bro narrative! Don’t look at the numbers! Just buy, buy, buy. Your realtor wants to buy another boat lol
Now is the time to buy, never been a better time to buy in history. If you’re sitting on the sidelines and not buying…. You’re going to miss out on this amazing opportunity.
Hi Johnni! Best time to buy and sell is now! :)
@@JasonWalter1 in the words of Dave Ramsey 😂😂😂
embrace the FOMO!
Love the video as well as everyone's input in the comments.
We recently offered on our potential first home needing repairs/updates & >60 DOM (North Austin). The offer was based on slightly smaller but similar homes recently sold in the same subdivision, but it appears the seller wants to value it at near 2022 prices minus repair costs, and compared to homes in other areas that are still active. We like the home and it has potential, but are practicing patience with this incoming data. Per Zillow, there's a lot of interest in the home, but it's just not going at it's current price.
@JasonWalter1 Please keep these coming!
Thank you for sharing and please keep your boots on the ground updates too!