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We’ve been asked a lot of questions recently about the state of our housing market in Austin, TX. At Nest Properties Austin, we spend a great deal of time behind the scenes studying market data and statistics to ensure we are advising our clients to the best of our ability. Here are a few data points I’d like to share to help provide some clarity around our current market conditions.

1. Contract Signings at Historic Lows

Contract signings dropped to the lowest level on record last month, as the housing market experienced a sluggish summer. According to the National Association of REALTORS® (NAR) Pending Home Sales Index, contract signings decreased by 5.5% in July and were down 8.5% from the same time last year. The anticipated sales recovery didn’t materialize over the summer due to affordability challenges, rising interest rates, and uncertainty around the upcoming U.S. presidential election.

However, despite the slowdown, many potential buyers may be waiting for mortgage rates to drop before entering the market. The Federal Reserve has indicated that interest rate cuts are possible in the coming months, which could provide some relief. Inventory levels have also increased by 20% compared to last year, creating more choices for buyers when the market picks back up.

2. Navigating Austin’s Market Amid Economic Shifts

Austin’s real estate market is facing a similar slowdown, driven by both national and local economic factors. The city’s heavy reliance on the tech sector has made it vulnerable to the wave of tech layoffs and job market uncertainty. Buyers, wary of these economic headwinds, have been hesitant to make significant financial decisions, especially with mortgage rates remaining high.

However, the situation could shift as we approach the end of 2024. As whispers of an imminent interest rate cut gain momentum, we’ve already seen an uptick in interest from buyers and sellers. This could signal an increase in market activity if rates drop as expected.

3. Election Uncertainty

The upcoming presidential election is further contributing to market caution. Historically, real estate activity slows down during election cycles as buyers and sellers adopt a wait-and-see approach. Many are holding off on major financial moves until they have more clarity on potential changes to economic policies, mortgage rates, and tax incentives.

4. Opportunities for Buyers and Sellers

Despite the current market conditions, Austin remains an attractive place to live with its strong tech industry, vibrant cultural scene, and abundant outdoor opportunities. Buyers who have secure jobs and access to financing may find this a prime opportunity to enter the market before competition intensifies in the coming months.

For sellers, patience and strategic planning are essential. Homes may sit on the market longer, and pricing your property competitively will be critical in attracting serious buyers. With the anticipated rate cuts and demand expected to surge in late 2024 and 2025, positioning your home correctly now could yield significant results.

5. The NAR Settlement: Minimal Impact in Austin So Far

Although the NAR commission settlement has been a hot topic in the industry, its impact in Austin has been minimal. While there are new rules about buyer representation agreements and displaying agent compensation, these changes have not significantly disrupted the traditional compensation structure in Austin—at least not yet.

Looking Ahead

As we move into the fall season, we expect continued fluctuations in the Austin housing market. For buyers, now may be the best time to take advantage of favorable prices and low competition, with the option to refinance as interest rates drop. Sellers, on the other hand, should be prepared for longer listing times and fewer offers but can benefit from strategic pricing and home presentation.

At Nest Properties Austin, we remain optimistic about the market’s future, particularly as economic conditions stabilize in 2025. Whether you’re buying or selling, our team is here to provide the expertise and insights you need to navigate these challenging times.

Feel free to reach out to us for more personalized advice on how to approach the current market and make the best decisions for your real estate goals.