Rapid Change in the North Austin Real Estate Market…Again.
Well here we go again. Another market shift is underway and the tide of real estate continues to ebb and flow. The spring brought tremendous, pent up demand for Homes. Good properties sold almost immediately with multiple offers. Prices were driven higher by low interest rate loans and ever dropping inventory.However, in May a dramatic change occurred in the market. Inventories rose dramatically and interest rates went up by one percent on average. The market turned on a dime, causing some sellers to realize that they had priced their homes above the market. The trajectory of home price was no longer up and the affordability of homes shifted downward by nearly $20,000. Through August 2013, great homes were still selling almost immediately when priced right and we were still getting solid offers and a high frequency of multiple offers. So here we are in September 2013 and NOW, what is happening? Well, as a business owner in Real Estate I can feel a “big breather” in the market. Inventories are turning back down and we are seeing much fewer listings and the volume of buyer activity is dropping. There are three reasons for this. 1. We estimate that at least half of the market is first time home buyers who are affected greatly by changes in interest rates and affordability. The interest rate hike has reduced the average affordability of a home by nearly $20,000 and at the same time prices have increased by about the same amount ($20,000). In other words, a buyer of a $200,000 house has lost nearly $40,000 of affordability. That is HUGE. 2. A good 25% of the market is investors. Investors want bargains and/or cash flow. In the early spring all of the low hanging fruit was harvested. Investors, too, were impacted greatly by interest rate changes and cash flow changes. Investors were forced to make good business decisions and not buy despite record high rents. 3. Seasonal shift. Every year as school starts and the days get shorter the number of sellers and buyers drop. These three factors have caused a rapidcool down in the Real Estate Market in Cedar Park and Round Rock.
Cedar Park Real Estate
West Round Rock Real Estate