FLUCTUATING FIGURES In the last several months, the local housing market has undergone a correction due to raised interest rates and other factors. The following data—taken from each December—shows what this stabilization has looked like compared to each of the last ve years.
Cedar Park
Leander
Georgetown
PRICE PER SQUARE FOOT
MONTHS OF INVENTORY*
CLOSED SALES
3.5 3
$250
200
$200
150
2.5
$150
1.5 2
100
$100
0.5 1
50
$50
0
0
0
2018 2019 2020 2021
2022
2018 2019 2020 2021
2022
2018 2019 2020 2021
2022
*MONTHS OF INVENTORY IS THE AMOUNT OF TIME IT WOULD TAKE TO SELL ALL PROPERTIES CURRENTLY FOR SALE AT THE AVERAGE MONTHLY PACE.
SOURCE: AUSTIN BOARD OF REALTORSCOMMUNITY IMPACT
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new home in Leander and build more equity. Increasing interest rates, however, have caused them to shift gears and alter their expectations. “[Our expectations] denitely changed,” Brandon Winnis said. “The cost to borrow money has gone up, and that denitely impacts the type of home that you would be able to get into. It’s denitely inuencing decisions, but we’re set on wanting to build equity.” Dishongh said rates are still beginning to stabilize, and this is ushering in a new normal. Buyers are working on adjusting to the changing market. “The rates are starting to normalize,” he said. “We’ve held steady at a 6% rate for several months now, so I think this is setting the new normal for us, and it’s taking time for people to get used to not see- ing 2.5% for so long.” Lower prices, more inventory Regarding home prices, Realtors have seen what is referred to as a market correction, or a rapid change in the price of a product. Dishongh said home prices were signicantly higher, and now, the decreases are an adjustment from them being overpriced before. In Cedar Park, the peak median price for a house was $535,000 in 2021, and in 2022, the peak price
was $604,800, according to ABoR data. Home prices dropped signicantly in December to $472,500—a 21.9% decrease. Median home prices in Leander followed a similar trend. In 2021, the peak median price for a home was $502,500 with a peak price of $567,455 in 2022. Prices fell 14.3% to $486,500 in December. Though prices are leveling out, homes are still tak- ing much longer to sell than before. In December, homes in Cedar Park and Leander stayed on the market for 71 days—more than tripling compared to 22 days in December 2021. With a less competitive, cooler market, potential homebuyers are gaining more of an interest. “We are actually, beginning of 2023, starting to see buyers come back,” Dishongh said. “I’ve actually had a couple where there were multiple oers again.” Oers are not every day like two years ago with major bidding wars taking place, he said, but it is dierent from recent activity with homes sitting on the market for three to six months at a time. With more homes on the market, inventory has boomed in the Leander and Cedar Park area. The cities had 1.9 months of inventory in December compared to 0.4 months in December 2021, according to the ABoR data. Because of the low
interest rates are causing more people to be priced out of the market. “Now, because interest rates have gone up, it makes it kind of less realistic for a lot of potential homebuyers to be able to aord the mortgage prod- ucts that are out there now,” he said. As ination continues to rise, mortgage rates are also back on the climb. Though the two factors are not directly correlated, experts said, interest rates oftentimes mirror ination as the Federal Reserve tries to curb price growth. These changing mortgage rates would cause the payment on a $450,000, 30-year home loan with average property taxes and insurance to increase by 29.7% from about $2,554 to $3,312, according to Fred- die Mac data. “One year [ago] would have been $800 less, so with the increase in rates, [homebuyers] are paying $800 more,” McKim said. “That’s a big dierence.” Thus, what prospective homebuyers could aord two years ago at a lower interest rate looks a lot dierent than what they could aord at a 6% rate. Brandon and Chanel Winnis, who have been renting for a few years, are looking to buy a
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