08/19/2022
https://www.kvue.com/article/money/economy/boomtown-2040/homelight-everyday-people-cash-offer-home/269-6ff20593-407f-4991-823f-d2bdaabbc0ad
Things have changed a lot from earlier this year when I gave this interview to KVUE (ABC) in Feb 2022. At that time, interest rates were still low and people were still desperate to buy a house, no matter the price. So there was a feeding frenzy, and the all-cash option I worked with helped a few of my clients get their dream house without much over-bidding.
Fast-forward a few months and there is now a noticeable slowdown in the market. Interest rates have gone up, headlines are screaming recession and housing slowdown, and suddenly everyone has put their home buying on hold "for a few months" to see if prices go down further.
I don't think the Austin area is going to have a major correction in home prices. At worst there might be a 10% to15% correction, but even that might not last long unless there is a major recession. Nothing wrong in waiting to see what happens, but I am advising my clients to be alert and ready to move fast if they find a house they like and the seller is willing to take a lower offer due to their specific situation.
Here are my reasons why Austin market will not crash:
1. All those folks that moved to Austin and are still moving as we speak will not vanish overnight just because there is talk of a recession. They will have to buy eventually unless they just want to keep renting and "wait for the big crash"
2. Current statistics show that there is still an under-supply in the Austin market.
Currently, houses are staying on the market longer, but "longer" is a relative term. Even now, months of inventory available (MOI) which indicates supply was 2.7 in July and 2.1 in June. Definitely supply is increasing, but in a healthy market, MOI should be 6! So it is still a seller's market even though not a ridiculous seller's market like earlier.
Similarly, avg days on market (DOM) before a house sells was 22 in July and 18 in June. Again it is getting better for a buyer, but still a long way from a healthy market.
3. Rents are at all-time highs. So landlords/investors are not going to panic and start selling like in the 2008 crash. As more people opt to rent rather than buy, rents should continue staying high.
Good luck to all home buyers! :)
HomeLight and other real estate companies have programs to help everyday buyers give cash offers on their dream homes.
