What’s up in the Real Estate Market in Four Points

What’s up in the Real Estate market in the Four Points Neighborhood. I hope you all like graphs because I do.   I have two graphs below that we can use to see what is happening.

First, for ease, I am using data from any home that is zoned to Vandegrift High School, and thank you to ACTRIS and Austin Board Of Realtors® for the data.   When the pandemic hit, we were in a Seller’s Market– that means that a house sells in three months or less, in the middle – 4 -8 months is a neutral market and when houses sit on the market for 9- 12 months then we have a buyer’s market.  Austin has had a strong seller’s market for many years, when the pandemic hit– and there was unknown about the virus and transmission, people were hesitant to put their house on the market which made things constrict even further.  Buyer’s who needed a home, would bid way over ask, waive appraisal fees, and request no inspections – to place their client’s offer in the best light and sometimes sight unseen from another part of the country. Which even made it a crazier seller’s market. We were talking about literally days on market…about 8 days around here.   We started to see a shift at the beginning of the year when the Federal Reserve Board started talking about raising interest rates.  In a nutshell, raising interest rates makes buying a home cost more than it did before interest rates increased.

Interest rates were approximately 3.0 percent in December – they are currently hovering between 5.5 and 6 percent.  If you are buying a $500,000 house. The payments for that home went from approximately $1900 in December to $2700 today.  So that $500,000 dollar house mortgage is $800 more a month.  Mortgage offerings are finding competitive ways to help make the cost of increased housing prices more affordable by offering certain products that make interest lower in the first couple of years and then it gradually increases to the current rate.  Many products assume that rates will go down, but remember we don’t have a crystal ball.

If you look at the graphs. The first one shows the number of Active Single Family Homes (SFH) compared to Closed SFHs. As you can see the number of active listings is increasing over the number of closing listings. So there are more homes hitting the market than homes closing, which means inventory is increasing significantly.  The second graph shows the absorption rate or the trend for either a buyer’s or seller’s market. You can see at the beginning of the 12-month period the days on market were below 1 (less than 30 days) in the last box it is over 3 (more than 90 days). Above we spoke of a neutral market is between 4-8 months. As you can see the trend is moving from a seller’s market to what we call a more neutral market. 

Alice Spanjersberg

Alice Spanjersberg

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