Austin housing bubble (home builders, taxes, prices)

[riaelise]

I think what we're seeing is a 'market correction'.

From my anecdotal, layman's observation -

Homes are sitting longer.
More homes on the market (and sitting)
Few of the "MULTIPLE OFFERS RECEIVED...." blurbs for almost every single house out there, regardless of price point.
Seeing some seller concessions (i.e. rate buydowns, etc.)
Few of those annoying "offer deadline" counters.
Waived contingencies are fewer.
Prices will not go down drastically to where getting a 3,000 sq ft home for $400k, but they are going down. Just about everywhere, too, not just the suburbs. I've seen a bunch of homes having price drops in town and sitting on the market.

I think the difference here is that sellers are perhaps waiting things out to see if the rates lower and the buyer pool increases. There are five homes in my neighborhood that have sat for weeks with only nominal price reductions. One continues to be priced at 1.1M.

The adage of "a home is worth as much as someone is willing to pay for it" definitely rings true here. Thanks to rate hikes and other factors, that "someone" is finding it harder to borrow. So, unless they have $$$$, they can't buy the home outright and have to carry a mortgage. Even out of state people flush with cash buy the homes with a mortgage (albeit a small one). The higher prices mean people have to put down a lot of money and have much higher incomes to cover monthly housing costs of $5000-6000.

[blameyourself]

Originally Posted by riaelise

I think what we're seeing is a 'market correction'.

From my anecdotal, layman's observation -

Homes are sitting longer.
More homes on the market (and sitting)
Few of the "MULTIPLE OFFERS RECEIVED...." blurbs for almost every single house out there, regardless of price point.
Seeing some seller concessions (i.e. rate buydowns, etc.)
Few of those annoying "offer deadline" counters.
Waived contingencies are fewer.
Prices will not go down drastically to where getting a 3,000 sq ft home for $400k, but they are going down. Just about everywhere, too, not just the suburbs. I've seen a bunch of homes having price drops in town and sitting on the market.

I think the difference here is that sellers are perhaps waiting things out to see if the rates lower and the buyer pool increases. There are five homes in my neighborhood that have sat for weeks with only nominal price reductions. One continues to be priced at 1.1M.

The adage of "a home is worth as much as someone is willing to pay for it" definitely rings true here. Thanks to rate hikes and other factors, that "someone" is finding it harder to borrow. So, unless they have $$$$, they can't buy the home outright and have to carry a mortgage. Even out of state people flush with cash buy the homes with a mortgage (albeit a small one). The higher prices mean people have to put down a lot of money and have much higher incomes to cover monthly housing costs of $5000-6000.

I agree with most of what you said but...

Houses are clearly appreciating at a slower rate but prices are NOT coming down yet (as far as I can see)

https://www.redfin.com/city/30818/TX...housing-market

https://www.google.com/amp/s/www.kxa...ort-shows/amp/

[Need4Camaro]

Yea, I haven't noticed a drop in prices either. There's a 3k sqft home in my neighborhood going for $800k.

[Ice_Major]

I'm seeing price cuts on online. This is for new builds and existing homes. A course with prices doubling in the last few years 2 - 3% reduction isn't much, but it is none the less a reduction. Homes are sitting longer. The amount of new construction inventory has exploded compared to a year ago. I do think the rates are having a big effect. Difficult to pay top price at double the interest rate, plus property taxes. Also insurance rates are going up due to the just terrible weather we've been getting in the last couple years.

[blameyourself]

Originally Posted by Ice_Major

I'm seeing price cuts on online. This is for new builds and existing homes. A course with prices doubling in the last few years 2 - 3% reduction isn't much, but it is none the less a reduction. Homes are sitting longer. The amount of new construction inventory has exploded compared to a year ago. I do think the rates are having a big effect. Difficult to pay top price at double the interest rate, plus property taxes. Also insurance rates are going up due to the just terrible weather we've been getting in the last couple years.

The reduction is from the listing price. Again that doesn't mean prices are going down (as shown by the links above).

For example, if my home sold for $550k last year and I list it for $600k, then reduce it to $585k to make a sale, did the price increase YOY? Of course it did. I simply reduced the price from the original listing price which was obviously too high based on current market conditions. All that's happening is homes aren't appreciating at the rate they were. That doesn't mean prices have come down if they are still higher than last year

[riaelise]

Originally Posted by blameyourself

I agree with most of what you said but...

Houses are clearly appreciating at a slower rate but prices are NOT coming down yet (as far as I can see)

https://www.redfin.com/city/30818/TX...housing-market

https://www.google.com/amp/s/www.kxa...ort-shows/amp/

I’m basing things by all of the price drops I see. I get updates online since I joined Redfin years ago. I do agree that the prices are still much higher than they were before… I am so happy that we bought when we did because frankly I don’t see homeownership being a reality for many people.

I think that window for sellers to sell their homes in a nanosecond without having to do much of anything has come to a close. It is by no means a buyers market but I’d consider it to be a weak sellers market. Homes are sitting for a long time now and while people are trying to wait things out, depending on the circumstance, sellers are having to slash their prices.

Wouldn’t want to buy or sell right now.

[riaelise]

Originally Posted by Need4Camaro

Yea, I haven't noticed a drop in prices either. There's a 3k sqft home in my neighborhood going for $800k.

Is it under contract?

At the markets peak our home would have sold at high 900s-1m but now I think it’d go for the high 800s maybe. Gone are the days when you can get a 3k sq ft home for 400k.

All of the homes in my neighborhood have been sitting for weeks. Holding steady with price but sooner or later I expect to see a price drop

[blameyourself]

Originally Posted by riaelise

I’m basing things by all of the price drops I see. I get updates online since I joined Redfin years ago. I do agree that the prices are still much higher than they were before… I am so happy that we bought when we did because frankly I don’t see homeownership being a reality for many people.

I think that window for sellers to sell their homes in a nanosecond without having to do much of anything has come to a close. It is by no means a buyers market but I’d consider it to be a weak sellers market. Homes are sitting for a long time now and while people are trying to wait things out, depending on the circumstance, sellers are having to slash their prices.

Wouldn’t want to buy or sell right now.

What's happened was pretty much predicted. Most of what I read by different analysts said the market would cool off. What we're seeing is what you stated...

-days on the market has increased

-sales of homes have decreased

-there is more inventory of homes on the market

-homes are appreciating at a much more normal rate

-prices have essentially stabilized

Hence, when people put their homes on the market in anticipation of the same growth trends we were experiencing, they are having to reduce their listing prices which are not in sync with current market trends.

What is not happening yet though, is a reduction of YOY prices like what we saw in 2008.

[Need4Camaro]

It's kinda funny looking back at the feeding frenzy and now analyzing a home sitting a few weeks on the market without selling as a housing recession ... I'm exaggerating a bit, but I think you get what I mean.

[riaelise]

Originally Posted by blameyourself

What's happened was pretty much predicted. Most of what I read by different analysts said the market would cool off. What we're seeing is what you stated...

-days on the market has increased

-sales of homes have decreased

-there is more inventory of homes on the market

-homes are appreciating at a much more normal rate

-prices have essentially stabilized

Hence, when people put their homes on the market in anticipation of the same growth trends we were experiencing, they are having to reduce their listing prices which are not in sync with current market trends.

What is not happening yet though, is a reduction of YOY prices like what we saw in 2008.

I do agree with your final paragraph. Like you, I guess we will wait and see as the jury's still out.

What'd be nice to see is a corresponding reduction in property tax. Even with the cooling off, WCAD is almost certain to have our taxes rise and they've already shot the valuation to the moon. A 'normal' increase on an already bolstered number bites :/