NAR Reports 10 cities with most Pent-up Housing Demand in 2024

Last month, I attended a NAR economic forecast, led by Economist Lawrence Yun.  Mr. Yun discussed many topics.  But one that I wanted to share with you, is his list of 10 cities where the market with the most pent-up housing demand.  Please go to the attached link to read the full article.

https://www.nar.realtor/research-and-statistics/research-reports/markets-with-the-most-pent-up-housing-demand

In the list, Austin, has earned the top #1 spot.  I am not surprised, with so many people still moving to Austin.   Other Texas Cities that made the list are Dallas (#2) and Houston (#7).  This will make it interesting as interest rates are forecasted to drop this spring.

If you are thinking of buying real estate, NOW is the time to buy before the increase demand surges.

SOURCE: National Association of Realtors website.

Austin Market Statistics for December 2023

 Austin Title reports the following Preliminary Market Statistics for December 2023 for Austin Real Estate:

Units Sold:

2,318 down 16.01% from December 2022

(This number is preliminary and may increase as sales are reported/updated in MLS)

Average Sales Price:

$548,622 down 0.48% from December 2022

Average Days on the Market:

88.06 days up 26.22 days from December 2022

Median Sales Price:

$436,640 down 1.41% from 1 year ago

In conclusion, 2023 was not a good year for Austin Real Estate.  The past 4 years have been much better.

SOURCE: Austin Title

Subject to or Wrap mortgages

As mortgage interest rates increase, we are seeing some creative transactions such as seller paying buy down rates for the buyer, buyers assuming seller's mortgage (if current mortgage allows) and subject to financing aka wrap mortgage. 

A real estate  lawyer, explains in the attached image why he advices against wrap mortgages. To explain, a wrap mortgage is when the buyer makes the payments in behalf of the seller without assuming the mortgage, which means the mortgage will remain under the sellers name though the deed has been transferred to the buyer.  The risk is that the buyer may stop making payments without the sellers knowledge,  hence, the property may go to foreclosure risking the sellers credit. In addition, the mortgage company may accelerate the balance of the mortgage once they find out a transfer of ownership occured. A brokerage I worked for will not allow wrap mortgages because of the risk of liabilities. Most of the time,  the sellers don't understand exactly what they're getting into though a lawyer is needed in writing the contract in this type of transaction.

This chart shows the relationship between the active single family residential property listings (in units) vs sold listings in the Austin Board of Realtor MLS.  In October, it shows 12,870 actives vs 2,585 units sold.  The supply is increasing rapidly as the demand slows especially in the cooler/winter months are here.  The current interest rate is at 7.92% (source: ABOR)

 

Here are the statistics for Austin's Real Estate Market. In October 2023, unit solds (for single family residential) in Austin were 4% higher than last October. In Lake Travis ISD, there was an increase of 10% compared to last October. This is great news as we have been seeing less sales since the beginning of this year except in May, where we saw a small increase. With the interest rates at 7.92% for 30 year conventional, mortgage companies have been creative and offering rate buy downs.
 

Inventory in Austin Increases as Mortgage Rates Increase to 8%

This graph goes all the way back to 2004, as far back as Austin Board of Realtors has the data.  As of September 2023, the active residential properties are at 13,027.  The average days on market of these active properties are 68.  In March 2021, we saw low inventory at 2,497 properties active with an average of 30 days on market.  The last time we had over 13,000 active listings was back in July 2016.  As the mortgage rates increase (currently at 8%), we will probably see more properties for sale.  Stay tuned for future blog posts.

 

September 2023 Austin Market Statistics

In Austin, TX, single family residential closed units in September 2023, were down 25% compared to last September.

In Lake Travis ISD, single family residential closed units in September 2023, were down 12% compared to last September.

As of today, 10/20/2023, there are 12,453 active single family properties in the market, 627 of these properties are in Lake Travis ISD.  As the interest rates increase (currently 8%), the number of homes for sale has increased.