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Texas Cities Where Home Prices Fall, Buyers May Take Over

After years of sellers taking the lead in the real estate market, the scales may finally tip in favor of homebuyers in some U.S. cities.

Since 2022, high mortgage rates and high housing prices have created a potent cocktail of unaffordability, marginalizing many potential buyers in some of the country’s most popular cities.

But with fewer potential buyers in the housing market, home prices are now falling in several U.S. cities.

The National Association of Realtors found that home prices fell in 15 of 221 markets in the United States in the first quarter of 2024 compared to the same period last year, including two in the Lone Star State: Austin-Round Rock (-0.3%). and San Antonio-New Braunfels (-4.6%).

The Austin-Round Rock area had a median home price of $466,700 in the first quarter of 2024, up from $467,900 in 2023. The median home price in the San Antonio-New Braunfels area — New Braunfels is a city San Antonio’s satellite between it and Austin, and one of the fastest growing cities in the United States, stood at $320,500 in the first quarter of 2023, and has now fallen to $305,800 in 2024.

The reason homes are getting a little cheaper is because demand has slowed, real estate agents in Austin and New Braunfels told Business Insider.

In recent years, Texas has attracted hundreds of thousands of transplants with its relatively affordable housing and plentiful job opportunities. Cities like Austin and New Braunfels have attracted many Californians and tech professionals attracted by remote work and the state’s low cost of living.

Demand from movers and other buyers, supported by historically low interest rates between 2020 and 2022, has fueled a surge in house prices, driven by increased competition.

But rising prices and mortgage rates have reduced affordability for many residents, leading to lower demand for home purchases. Without enthusiastic buyers lining up at open houses, homes listed for sale are staying on the market longer than in the recent past.

In April, the average time to sell a home in Austin increased to 40 days from 38 days the year before, according to Realtor.com. Similarly, in New Braunfels, homes now stay on the market an average of 53 days, compared to 49 days in April 2023.

This trend has led many sellers to lower their prices, although prices remain significantly higher than a decade ago.

Some Texas home sellers are lowering prices and offering concessions

Austin real estate agent Nicole Marburger told Business Insider that the city’s real estate market is finally coming back down to earth.

From 2020 to 2022, Austin experienced a huge boom in its real estate market, marked by intense competition, bidding wars, and rapid sales. But today the market has changed.

“Most homes no longer sell in a matter of hours or days,” said Marburger, founder and owner of Austin-based Legacy Real Estate Group at Compass. “Some can sell in two to three weeks, while for others it can take two to three months – it just depends on the area the house is listed in.”

As homes linger on the market, sellers are reducing their prices to attract buyers, she added.

Marburger said she recently worked with a client who purchased a home originally listed for $1.25 million for just $850,000. It even came with a concession, which is when a home seller offers the buyer additional incentives, such as money for home repairs or mortgage rate buydowns. .

As buyers become more demanding, she said more sellers need to adjust their expectations.

“Sellers who wait for record market prices unfortunately risk finding that unless their property really stands out, today’s reality does not match their aspirations,” she said.

Some Texas Cities Have Become Buyers’ Markets

New Braunfels — a booming area about 47 miles from Austin and 35 miles from San Antonio — is seeing a similar shift in its real estate market.

Broker Mercy Boatright, owner and founder of real estate agency House Hunters, told Business Insider that New Braunfels homebuyers now have the upper hand.

“It’s definitely a buyer’s market right now,” Boatright said. “Prices are returning to normal. Homes are no longer valued at exorbitant prices.”

Boatright said New Braunfels homes with higher price tags are having trouble attracting offers. Sellers who resist reducing their listing prices are learning their lesson, she added.

“Homes only sell if the seller’s price goes down,” Boatright said.

On the other side of the closing table, Boatright said she encourages her buyer clients to consider submitting offers on homes even if they’re beyond their budget — a seemingly modest offer could still potentially secure a sale.

“I’m like, ‘Hey, if this is the house you want, let’s make an offer. I don’t care if it’s $30,000 off,'” she said. “We try and I get them every time.”

businessinsider

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