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Fall breeze begins cooling Austin housing market

Austin's housing market is cooling as seasonality hits the market. (Austin Real Estate/Facebook)

Home sales in the Austin-Round Rock metro dipped 4.6% in August 2021 compared to August 2020 as the housing market slowly trends downward in time for a cooler fall.


According to the Austin Board of Realtors' monthly report, August home prices rose 34.7% year-over-year to an average of $470,000 across the metro, setting a record for the month. But it appears that the pandemic's rapid price increases, which saw average home prices rise exponentially for months, are finally cooling as seasonality slows down rapid month-over-month growth.

While prices are cooling with the weather, Austin Board of Realtors President Susan Horton said that people are once again settling into their yearly routines as the pandemic shows less of an effect of market trends. But despite a less red-hot market, it's still prime time to buy in Austin.

"While we continue to experience record-high housing demand across the region, REALTORS® are seeing a return to seasonal market trends, something that we didn't experience in 2020," Horton said. "For the fall, that means fewer homes hitting the market and slowing price growth each month, as people have settled in after the summer and before the holidays. There is still no better time to buy in this market as, overall, prices will never be lower than they are today."

The numbers come after July saw home sales dip for the first time since May 2020. August saw a $10,000 dip in average home sale prices from $480,000 in July after an all-time record of $482,364 set in June.

A slowing market could make for a sweet spot for Austin homebuyers looking to dip their toe into the region's consistently low inventory: the ABOR report found that while monthly housing inventory dipped by 0.3 months to 1 month of inventory when compared to last year, inventory levels are higher than they've been since last October. July saw 0.9 months of available inventory.

According to a study from Realtors.com, that prime time could be sooner than expected. The week of Sept. 19 is predicted to be the best time for Austin homebuyers to find more options for less.

While seasonality has once again taken a hold on the "boomtown" Austin market, economist Mark Sprague said in the ABOR report that a booming job market and continued migration will keep the market far from normal levels.

"There have been reports of Austin's housing market being overvalued, but from an economist's perspective, my question is, 'overvalued compared to what?'" Sprague said. "The Austin market is robust, and sales activity and pricing have been driven by true demand. A combination of events, including increased job creation in the market, low interest rates, shifting priorities for perspective buyers, and in many cases, increased personal savings following stay at home orders during COVID, are why the Austin MSA is a top market in the country. When there is this much demand, it is difficult for an entire market to be considered overvalued."

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