Will the Austin Housing Market Crash in 2024? – Norada Real Estate Investments

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The Austin housing market has been one of the hottest in the nation for several years, with soaring home prices, low inventory, and high demand. However, signs of cooling emerged last year, as more homes hit the market, sales declined, and prices softened. Does this mean that the Austin housing market is headed for a crash in 2024?

There is no consensus among experts on whether the Austin housing market will crash in 2024. Some experts believe that the market is overheated and could be due for a correction, while others believe that the strong fundamentals of the Austin economy will support continued price growth.

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A crash implies a sudden and severe drop in home prices and sales volume, usually triggered by a major economic shock or a systemic failure in the housing sector. However, none of these factors are present or expected in the near future for Austin. On the contrary, Austin has a strong and diversified economy that continues to attract businesses and workers from other parts of the country and the world.

Austin still ranks as the No. 1 city to live in Texas according to a recent report by U.S. News & World Report. It ranks 13 on a list of the fastest-growing places in the U.S. According to MoneyGeek, Austin ranked no. 6 for job seekers in 2023, based on multiple factors including growth in employment during the last 12 months and three years and growth in hourly wages. It ranked at no. 2 in the list of best cities for Gen Z job seekers.

Factors that could lead to Austin Housing Market Crash:

  • Rising interest rates: As interest rates rise, it becomes more expensive to borrow money to buy a home, which could lead to a decline in demand and home prices.
  • Overbuilding: If too many new homes are built in Austin, it could lead to a glut of supply and a decline in prices.
  • Economic recession: If the US economy enters a recession, it could lead to job losses and a decline in consumer confidence, which could also lead to a decline in home prices.

Factors that could support the market:

  • Strong job growth: Austin is one of the fastest-growing cities in the US, and its strong job market is attracting new residents from all over the country. This is driving up demand for housing and supporting home prices.
  • Limited supply: Austin has a limited supply of land available for development, which is also supporting home prices.
  • Investment demand: Austin is a popular destination for investors, who are buying up homes to rent out or sell later for a profit. This is also driving up demand and home prices.

Latest trends in 2023:

  • Home prices in Austin have been cooling off in recent months. According to the Austin Board of Realtors, the median sales price of a home in Austin MSA was $452,080 in September 2023, down 4% year-over-year.
  • The number of homes sold in Austin has also been declining. There were 2387 homes sold in Austin in September 2023, down 18% year-over-year.
  • The average time it takes to sell a home in Austin has increased to 65 days, up 24 days from September 2022.

These trends suggest that the Austin housing market is stabilizing and becoming more favorable for buyers, who have more options to choose from and less pressure to make quick decisions or offer above the asking price. However, this does not mean that buyers can expect to find bargains or lowball sellers. According to another data by Refin, the Austin housing market is still somewhat competitive, with homes selling for about 97% of their list price and staying on the market for an average of 59 days in September 2023.

Moreover, not all segments of the market are experiencing the same dynamics. There is still a shortage of affordable housing options for first-time homebuyers or those looking for more budget-friendly homes. The lower-priced homes tend to sell faster and receive more offers than the higher-priced ones. Therefore, buyers should work with experienced REALTORSĀ® who can help them navigate the market and find the best opportunities for their needs and budget.

Overall, the Austin housing market is still strong, but it is showing signs of cooling off. It is too early to say whether the market will crash in 2024, but buyers and sellers should be aware of the potential risks and be prepared for changes in market conditions.

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