There are a lot of buyers out there waiting to buy. Waiting to see if there will be a crash. Waiting to see if prices will come down. News flash. Home Buying in 2022 in the Austin Metro is not slowing down this year or in the foreseeable future.
As full-time real estate professionals, we are in the market. We have experienced first hand the unprecedented demand for our area. We have helped many buyers win bidding wars and have helped many sellers get top dollar for their homes. All while keeping a close eye on trends, attending local economic updates, reading Austin Business Journal, watching information from local Chambers of commerce and even following trends on social media.
In a recent economic update from Independence Title hosted by local economist Mark Sprague, the outlook for the Austin metro is still very good. A strong job market combined with strong demand for housing and low inventory will keep prices stable and likely rising. Interest rates are expected to rise, although not dramatically. They are still at historical lows. See Mark’s full presentation here ITC Austin Whats on the Horizon Jan 2022.
So what is the cost of waiting to buy?
To see the numbers on buy now vs later, here is a breakdown based on a $500,000 home with a 5% downpayment. Column 1 are the numbers for buying now. Column 2 shows the numbers if you wait a year. This breakdown shows the difference between buying now, at today’s rates and prices, versus buying next year after rates likely go up and prices likely go up, based on all economic indicators.
Of course no one can predict the future, but what we can do is look at all the data and facts. Local economic experts do not foresee a slowdown in the market for 2022 and for several years beyond that. Why? Supply and Demand. Costs of materials and shortage of labor will also affect low inventory.
The last 18 months was a wild ride in the Austin market. With people being able to work from home and many major announcements for companies relocating to the Austin Metro, our prices skyrocketed. There was simply not enough inventory to quell the demand, which resulted in bidding wars and rapidly rising prices. The reality is that Austin was undervalued anyway for a major metro area with major job growth, good schools, mild weather and overall nice quality of life. There have been a lot of people eyeing making a move to Austin for many years and everything lined up to make it happen.
So, if you think Austin has gotten “too expensive to buy” and you are waiting for pries to come down, consider looking at Austin prices (especially the suburbs) compared to other desirable cities in the country. Compared to Seattle, San Francisco, Washington DC, New York and other business hubs, our prices still have room for growth. If our prices go up another 10% by the end of next year, it will cost you a lot more to buy a home, especially with rising interest rates.
If you are thinking of buying, let’s meet to discuss a game plan and see if buying now would be beneficial in your situation. My lending partner, Tyler Buske with Mid America Mortgage, can run different scenarios for you to help you make a more analytical decision.
For sellers, it may seem like people will buy anything. You don’t have to fix anything and you can ask whatever you want. Maybe last summer, but now buyers are more cautious, especially since homes are significantly more expensive than they used to be. Today’s buyers are having to come in with a lot more cash which means they have less wiggle room for improvements. Property taxes are also a lot higher (based on increased values) so that can affect their purchasing power. One thing that hasn’t changed; most buyers don’t want a big project – unless the home is priced significantly under market. There are ways to maximize the appeal of your home without spending more than your return on the investment. If you are thinking of selling, let meet to evaluate the market and your home’s salability in today’s market. More more info about the home selling process, see our Listing Services and the 28 Things that Add Value.