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Here are the July/2022 MLS single-family statistics for Austin, TX:
Our Austin metro home sales market continued to slow down in July much like a plane coming in for a landing from a very high altitude that gently glides to the runway...no abrupt descents but a slow and steady descent. As you can see in the chart below, we had our 1st single-digit price increase that we’ve seen since spring/2020 when the Covid breakout began to spread across the U.S. While these lower price increases of 6% (median) and 8% (average) may seem very low, keep in mind that the Austin metro averaged 5.5% and 5.1%, respectively, in the decade of 2010-2019.
Both the home price drops and homes staying on the market longer that we’ve undoubtedly over seen the past 2-3 months are the result of list prices being too high. The examples below reflect the major shift in how we priced homes before Covid vs. the past 2+ years since Covid started in spring/2020. So far this year, home prices continue to rise, but at a slower rate from our 17-19% YTD in 2022 to 6-8% in July. The coming months will tell us whether this pricing will still continue to have slower appreciation, or not.
Home listing price examples:
Before Covid, Realtors would run a CMA (comparative market analysis) for a home and list it at the $500k the CMA showed using the average of the past 3-5 comparable sales (comps). Sellers expected to receive 95-100% of this price and, if lucky, would get multiple offers that would push it higher than the price they listed it.
Since Covid (until a few months ago), however, that same $500k home would have likely received multiple offers and gone for, say, $600k. Smart sellers and their Realtors realized they shouldn't price it at the $600k we did before Covid because the $100k runup was the result of "buyer frenzy" created since Covid. This allowed the unpredictable "buyer frenzy" to run up the price to whatever the last willing buyer would pay and take into account the current "buyer frenzy of the day" since Covid had changed things so much.
However, sellers and Realtors who didn't heed this advice are now "lowering their list prices" due to this recent cooling over the past few months as mortgage rates shot up and economic uncertainties darken the horizon. If they, too, had priced at $500k, maybe the buyers would have taken it to $525k, $550k, $575k, etc and they wouldn't be dropping their prices, but simply selling their home at a lower price appreciation rate than sellers got 6+ months ago. Home prices in the Austin metro still rose last month, albeit at a slower rate.