Last month we gave our readers a rundown of how the Austin real estate market has been doing this year. Clearly things were heating up faster than a herd of cattle in the summer without a shade tree. Record home prices and sales numbers were starting to be a norm month after month. With more and more people moving to Austin there have been a lot of interested buyers. But then the June numbers came out, and it appeared buyers did a brake check.
So why did the number of home sales go down from 2,991 homes sold in May to 2,767 in June, when June is historically one of the biggest month’s in Austin real estate? Allow us to explain.
Low Inventory Means There’s Less to Buy
Sellers in Austin will be glad to know that there’s not as much competition as there once was. One of the biggest factors for the drop in home sales in June was the fact that there was only a 2.9 month inventory. In other words if no more homes were put on the market we’d sell out of homes within 2.9 months.
Austin real estate experts say this is an issue that makes keeping up with demand a bit dicey. New construction has picked up but not enough to make up the difference. To put it in perspective, a healthy, balanced market has an inventory of around 6 to 6.5 months. Even during June 2012 we were only at 4.4 months inventory.
Other Factors Affecting Home Sales
The other factors that are influencing the June drop in home sales are financially related.
- Interest rates are creeping back up.
- Home prices are creeping up (see below).
- Lending is still relatively tight.
Two of the three are out of our control here in Austin. As far as prices go, it may be a factor on both sides of the equation. Buyers are more hesitant or getting priced out, but sellers may be holding out because they are waiting to put their home on the market a few months down the road when prices might be up a little more.
Encouraging Statistics for the Austin Real Estate Market
The June statistics did have some really good numbers in it as well. For one, the average home sale price bumped up to $303,972 and the median sales price jumped to $235,000. This is an increase of approximately 7% and 8% respectively compared to the same time last year.
Everything is leading up to one conclusion. Buyers are interested, there are just barriers to entry into the Austin real estate market. Without the supply to meet the demand we’ll likely see more new construction, prices that climb a little higher and lots of multiple offer situations.
Original Source: https://squarecowmovers.com/real-estate-news/austin-home-sales-take-an-unexpected-dip-in-june-heres-why
Image Source: wksu.org/news/images/36345/house-for-sale.jpeg