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Lately, the real estate topic “du jour” has been the direction of our real estate market given the changes we’ve seen over the past few months. Keller Williams Realty has 2 annual sales conferences and we just finished the last one a couple of weeks ago. During it, Gary Keller, co-founder of Keller Williams who has been in real estate since he graduated from Baylor in 1979 with a degree in real estate, made the following statements:
“We don’t believe we’re going to see negative price [appreciation]”...while noting it’ll take at least four years for the market to reach the historic trendline of 4 percent home price growth.
“We believe that we will simply see a reduction in the rate of inflation [for home prices].”
He said homebuyers are currently spending 25 percent of their income on housing costs, which albeit high, is still lower than previous decades when homebuyers spent up to 35 percent of their monthly income on a mortgage.
“You’re still in a seller’s market nationally right now,” Keller said. “It doesn’t quite feel like it, but when it’s only 14 days on the market [to sell a home], excuse me, it’s a seller’s market.”
Here is a good example of media reporting that leads to incorrect information getting to home buyers and sellers and feeding the anxiety that many people have recently based on what they read in “the news” [this one if from Yahoo! Finance] These top 5 housing markets are expected to crash first — do you live in one of these fast-growing cities? (Austin is mentioned as #1) Here are some quotes from the article: “If you call one of these five cities home, you might want to prepare for your home’s value to take a tumble in the year ahead…The median home price on listings in Austin for July was $650,000 at $364 per square foot, up 18.2% year over year. But homes have been selling at nearly double that amount, with the median home sale price at $1.3 million ($676,000), with homes being picked up after a median 41 (16) days on the market. A 15% drop in home prices would lower the median listing price to $552,500 — a drop of $97,500.” [The correct data, taken directly from the reports that the TX A&M Real Estate Center that our local board of Realtors uses each month is in red brackets after each of the statements in bold above.] They use 15% because “home prices are much higher than they should be in the long term — by about 15%, according to mortgage giant Fannie Mae.” No other reason than they are “higher than normal”?! No consideration given for the strength of the local economy, in-migration of new residents, job growth, etc? Watch David Tandy’s presentation, below, to get the REAL facts of our Austin metro market.
Austin Real Estate Market Update - Aug 2022 This is an update of just how strong our market is given by David Tandy, the CEO of one of our local title companies. I’ve known David for about 6 years and have attended each of these semi-annual presentations he makes to local Austin realtors. I’ve found him to be very knowledgeable, level-headed, fact-driven and experienced in what he tells us during these seminars. I believe if you take 1 hour of your time to watch it in its entirety, you will be more knowledgeable and have less concern about our Austin real estate market than if you simply listen to all of “the news” that’s out there.
Lastly, you can see in the months of inventory chart below that–while we’ve risen sharply the past 4 months–we are only now at numbers we saw in the 2 years immediately before Covid hit. Those were very strong seller markets then, too. For you home buyers out there, I strongly encourage you not to wait until things settle down in the next few months (or even until next spring as I heard someone say) because I am still bullish long-term with Austin home prices and future increases. As they say, “Marry the house, date the rate”...buy now before home prices rise more to lock in your price…you can always refinance your mortgage if rates go back down.