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Austin's housing market is cooling as seasonality hits the market. (Austin Real Estate/Facebook)
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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Austin's home buying market could hit a sweet spot in September. (Pexels)
But there may be a sweet spot. According to Realtor.com, prime home-buying season is fast approaching nationwide, and the best time to buy in the Austin-Round Rock metro is a one-week span from Sept. 19-25.
Austin will join I-35 neighbors San Antonio and other national markets including Washington, D.C. and Chicago in reaching their peak that week. The five-county metro could see up to 13% more listings and 22% fewer page views per listing when compared to its peak. Austin should also see significant price drops: the week should see median listing prices drop nearly 5% below the peak and have 1.6% more price reductions when compared to the average.
With listings lasting 34% longer than on peak weeks, it could be a prime opportunity for homebuyers to slide into that increasingly high barrier of entry.
Danielle Hale, Realtor.com's chief economist, says the coming weeks will be especially beneficial for first-time homebuyers.
"Home prices peaked in the summer, and new listings continue to come on the market helping slow the pace of sales—which is good news for homebuyers," Hale said. "As families across the country focus on getting back into school routines, there are fewer buyers in the market, creating a great opportunity especially for first-time homebuyers to make a purchase with somewhat less competition."
The study comes after the latest Austin Board of Realtors report shows Austin home sales dropped for the first time since May 2020 in July. Residential home sales in the metro dropped by 9.9% and the median home price in the city of Austin dipped slightly from $575,000 in June.
ABoR MetroStudy Regional Director Vaike O'Grady said that the market could begin to cool from the heat of early summer. But with record year-over-year median housing prices in July, O'Grady said the housing market will not slow down in the long-term anytime soon.
"Seasonality has a hand in the increasing home sales growth across our region and nationally," O'Grady said. "If you're looking to buy or rent a home, don't miss this opportunity to take advantage of the market's slower pace. If you're looking to sell, don't mistake this dip as a cooldown—it's still an excellent time to sell a home."
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You can live among the string of bars in the Red River Cultural District. (Sonia Garcia/Austonia)
It's no secret that Austin is starved for housing because every neighborhood in the city is growing exponentially, according to Austin Apartment Association Executive Vice President Emily Blair, but especially those that are close to jobs, like downtown.
"We're seeing the occupancy increase in all parts of Austin, honestly," Blair said. "Finding accessible rates based on whatever your income is always a challenge in a really hot housing market."
So before you start packing up your current place with plans to move to a fresh neighborhood, Blair has some advice: "don't." She says if the prices of your dream area are a bit too much to bear, give it 12 months and try again.
Here is what rent in Austin's nightlife districts will run you from least to most expensive.
The Domain
Lovingly dubbed Austin's "second downtown," The Domain has been a city staple since its first phase was completed in 2007. While you'll sacrifice the proximity to downtown's cluster of night districts living at The Domain, you'll make up for it in savings. The Domain falls in the North Burnet neighborhood, where most people pay around $1,465 per month.
The closer you get to the shopping center, the more expensive apartments get, though you can find highly desirable complexes just a stone's throw away. Living at The Domain is about 51% cheaper on average than living downtown and 10% lower than the city-wide average, with a similar array of amenities: high-end shopping, whimsical bars, proximity to Q2 Stadium, restaurants for any and every occasion, groceries, nature trails and apartment complexes. Plus, the Domain is one of the safest nightlife districts in Austin, just shy of West 6th Street and Rainey.
What you can expect to pay on average based on apartment size at the Domain:
- Studio: $1,524
- One bedroom: $1,918
- Two-bedroom: $2,573
- Three-bedroom: $4,627
South Congress
Depending on where you're living on South Congress—right on the bustling strip or closer to Ben White Blvd.—average rent fluctuates between $1,571 and $1,724 per month. Historically a low-income area, South Congress has become one of the pricier areas to live in but still hovers right around the Austin average of $1,619.
No matter where you choose to live on the central street, you'll be surrounded by local legacy restaurants, like Home Slice, Guerro's and Trudy's South Star; iconic shopping from businesses like Lucy in Disguise with Diamonds, Kendra Scott's flagship store, Prima Dora and Music Lane's new development; and skyline views that rival many other hotspots. Studios and three bedrooms are much more affordable on South Congress than The Domain, though the price makes a steep jump at the one-bedroom mark. South Congress falls right in the middle of the pack for crime, the most common report being vehicle burglaries.
What you can expect to pay on average based on apartment size on South Congress:
- Studio: $1,132
- One bedroom: $1,957
- Two-bedroom: $2,677
- Three-bedroom: $3,777
East 6th Street
East 6th Street has been gaining traction as a boozy strip for a while now, and so have its rent prices, coming in 27% higher than the citywide average. The average East Austin renter pays $2,060 per month but you can easily spend a lot more if you're looking for anything bigger than a studio—prices in East Austin are rising so fast that it's forcing lifelong residents out.
On top of its longstanding affordability crisis, East 6th Street tends to be one of the higher crime nightlife districts, behind "Dirty" 6th and Red River Cultural District, with high theft and assault with injury reports.
What you can expect to pay on average based on apartment size near East 6th Street:
- Studio: Between $1,800 and $2,710
- One bedroom: Between $2,010 and $3,707
- Two-bedroom: Between $3,060 and $5,136
West 6th Street
If you want to stay in the downtown area, this is the cheapest party neighborhood to choose from but it will still put a big dent in your wallet because it costs about 74% more than what Austinites pay on average. Living near West 6th will give you access to a less chaotic but equally fun bar scene compared to its eastern counterpart—Star Bar, The Roosevelt Room and Green Light Social all adorn the strip.
Beyond that, you can expect to feel pretty safe walking along West 6th because it is the second-safest nightlife district in the city. Be careful on the roads though—the most common reports are of theft and DWIs.
What you can expect to pay on average based on apartment size near West 6th Street:
- Studio: Between $1,550 and $2,489
- One bedroom: Between $1,550 and $2,914
- Two-bedroom: Between $2,998 and $4,142
Red River, Dirty 6th Street and Rainey Street
All falling within less than three miles in the downtown area, living near the live music haven of Red River, the party at Dirty 6th or the colorful Rainey Street will cost you around $2,981 per month—downtown renters pay 84% more on average—though the neighborhood offers much more wiggle room in terms of price than the likes of East 6th.
The price will get you some of Austin's most famous music venues in your neighborhood, like Stubb's, Antone's and Mohawk; ready access to Lady Bird Lake, walkability to dozens of diverse restaurants and some of the oldest bars in the city.
You'll find the most crime between Red River and Dirty 6th, which have high theft and assault cases, but Rainey Street is the safest night district of them all with less than 150 theft reports from the last five years.
What you can expect to pay on average based on apartment size in the downtown area:
- Studio: Between $1,367 and $8,263
- One bedroom: Between $1,987 and $5,946
- Two-bedroom: Between $2,993 and $9,017
- Three-bedroom: Between $1,367 and $9,540
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