November 2023 Austin Market Update: Are we in a Buyer’s Market?

by | Dec 1, 2023 | Attorney Resources, Client Resources

I hope you all have a peaceful and relaxing Thanksgiving week and weekend, and are able to enjoy time with friends and family!  Read this now or after the holiday!  There shouldn’t be much change. 
As we start to wrap up the 2023 year, I wanted to provide a quick Austin MLS Market Update, summarizing what we have seen in the real estate space up until November of this year, and see if we are in a buyer’s market.

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Inflation Trends & the Fed’s Response

  • We observed a notable cooling in inflation as of October. The Consumer Price Index (CPI) remained flat compared to September, with an annual decrease from 3.7% to 3.2%. 
  • Core CPI, excluding food and energy prices, also showed a decline. 
  • This trend reflects a substantial reduction in inflation from last year’s peak, largely due to decreasing gasoline, used car prices, and moderating shelter (home/rent) costs.
  • The Federal Reserve hiked the Fed Funds Rate to its highest level in 22 years, aiming to slow the economy and curb inflation.  However, there have been no further hikes in their Sept or Nov meetings – maybe a wait and see approach towards additional economic data.
  • Jobless Claims have hit a two-year high.  

So what does this mean for the Real Estate Market?   

These economic factors are vital for us in the real estate sector. The cooling inflation and potential pause in Fed rate hikes might bring some stability to mortgage rates, which could certainly help liven up the buyer pool in this market!   

GOOD NEWS– Mortgage Rates have declined for the 3rd week in a row! 

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Buyer’s Market? Advantages to Buying In this Market!

The absorption rate and current inventory are good indicators or whether or not we are in a buyer’s market or seller’s market. In general, less than 3 months of inventory indicates a seller’s market, and more than 6 months of inventory indicates a buyer’s market.  So going by these rules, we are in a balanced market. However, I still believe we are slanted towards a buyer’s market viewing from the “field.”During a buyer’s market, it makes sense to price competitively because buyers have additional options and thus, added negotiation power.

Advantages to Buying In this Market!

Additionally, the optimal time to sell is mid Feb- Aug/September when the market is hotter and moves quicker compared to the late fall and winter holiday times.The Austin Metro is consistently very seasonal. There are almost twice as many homes put under contract during the peak spring months vs. the holidays. 

Combine seasonability with the higher inventory and lower buyer pool, and current market, and buyers are seeing advantages that weren’t available in the last several years, such as:

  • Price Reductions
  • Seller Concessions towards closing costs or interest rate reductions
  • Additional incentives and flexibility provided by the seller
  • Accepted Contingencies 

Seller concessions appear on 75% of the purchase contract I see these days.  It is obvious we are in a buyers’ market, and sellers, especially builders, are willing to do whatever it takes to get a signature on the dotted line.  

So how much in seller concessions are allowable?    

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Every transaction is different and it depends on the buyer’s down payment and the parties’ negotiations.  There could be a minimum 3% in seller concessions allowed, and up to 9% depending on down payment and actual closing costs (lender fees, prepaid taxes and insurance, HOA dues, origination fees, discount points, etc…).

It doesn’t always make sense to buy down the interest rate – a price reduction or concessions towards your closing fees may be more beneficial.  It all depends on the transaction, buyer plans/financial goals, and when rates go down in the next few years.  

Agent Stats as of Nov 4, 2023

It’s no secret that this has been a challenging market for buyers, sellers, lenders, agents.   Here are the stats for the Austin Board of Realtors agents this month.  

  • 18,693 REALTOR members of ABOR. (-6% vs Aug 2023)
  • 7,038 agents have sold 0 homes in 2023. (37.7%)
  • 11,655 agents have sold at least 1 home in 2023. (62.3%)
  • 7,881 agents have sold at least 2 homes in 2023. (42.2%)
  • 3699 agents have sold at least 5 homes YTD (10 months), which is roughly 1 sale every other month. (19.7%)
  • 1,333 agents have sold at least 10 homes YTD, which is roughly 1 sale per month. (7.1%)
  • 302 agents have sold at least 20 homes YTD, which is roughly 2 sales per month. (1.6%)
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So this THANKSGIVING as well as all year long, I am extremely grateful and blessed to be in the 1.6% below, and have the opportunity to serve you and work alongside you.

I appreciate your trust, support, referrals, friendship and business and I do not take it lightly. 

I work hard and with honesty and transparency, and I love what I do.

So thank you for allowing me to continue to serve!    

Enjoy your Holidays and your weekend!

I would love to hear from you!  

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