It’s probably the number one question I get from clients.
The truth of the matter is, no real estate agent can answer this question with great certainty because, though we wear many hats, we are not psychic. But I want to share an interesting article published recently by Realtor.com that points out there are some signs the housing market is changing.
Much of the article focuses on national data, and the gist of it is this: some data suggests housing sales growth is slowing. Realtor.com reports that prices aren’t rising as fast as a few years ago. (The site focuses on list-price data rather than sale-price data.)
I want to be clear that the changes in the market are NOT the same as prices falling, and the article makes clear that nobody can really accurately forecast if or when that might happen. In fact, economists are conflicted over whether the next housing correction will just mean that price gains slow or if prices will decline or flatten.
Here’s the section of the Realtor.com story about Austin:
Austin is a particular eye-opener: List prices dipped about 3%, to a median of $362,000 in August compared with the previous year, according to our realtor.com analysis. The year before that they dipped 2%. And while median sales prices (what these abodes actually fetched) actually rose 4.2% for the year, according to CoreLogic, it’s the slowest rate of growth since 2010.
“Home prices have just gone up too fast,” ATTOM’s Blomquist says of Austin. “It doesn’t mean that all of a sudden it’s a market that’s going to crash. But it does mean there are limits to what people can afford.”
Deeper in the story, the article includes a comment from a Moody’s Analytics economist who predicts prices will fall about 3 percent in Austin over the next few years.
Folks, who the heck knows if this economist’s forecast will be proven accurate. I have noticed some signs that the Austin market is shifting. Open houses are a little quieter, and price drops are a bit more common. But I can’t say for sure how long this will last or if it’s just a seasonal dip. For the sake of housing affordability, personally, I hope that we’re headed toward a more balanced market that allows buyers to have more leverage in negotiations.
Regardless, I discourage trying to time your buying or selling decision around the market. It’s very helpful when it comes to pricing and negotiations to know the market, and that’s my job. But when sellers or buyers try to time the market, they often get it wrong, either selling too soon or buying when they think prices have bottomed and then prices continue to decline.
Unless you’re an investor, make your decision about buying or selling based on your personal circumstance. Sell when it makes sense for YOU. Perhaps you want to downsize. Or you need a bigger house. Or you are moving to a new city.
For buyers, take the same approach, so long as you also pay attention to whether interest rates are rising. (Spoiler alert: yes, they are). And if they are, buying sooner rather than later makes sense. But that doesn’t mean to rush out and buy a house this minute. It’s just as important that you have adequate savings for a down payment and are taking on a responsible amount of debt and a loan that allows you to pay down the principal every month.
Sell when you’re ready to sell; and buy when you are able and ready.
Have more questions about the housing market?
Feel free to ask! Email me at firstname.lastname@example.org.
Lilly Rockwell is a real estate agent and former journalist based in Austin, TX.