As we approach 2025, Austin's real estate landscape is poised for notable changes. According to a recent report by Zillow, the city is expected to experience a "gradual but bumpy decline in [mortgage] rates," influencing both sales and price growth in the coming year.
Increased Sales Activity: Zillow forecasts approximately 100,000 more home sales nationwide compared to 2024, indicating a potential uptick in buyer activity.
Modest Home Value Growth: Home values are projected to grow at a "low and slow" rate of 2.2%, suggesting a period of stabilization following recent market fluctuations.
Inventory Recovery: Both inventory levels and new listings are expected to continue their recovery from the lows experienced during the pandemic, offering buyers more options.
Austin's Current Market Snapshot:
Recent data highlights a 3.4% decrease in annual average home values from 2023 to 2024 in the Austin area. As of November, Zillow's Home Value Index estimates the average home in the Austin metro to be worth $443,995. This figure slightly surpasses the Austin Board of Realtors' reported median home sales price of $435,000 for the Austin-Round Rock-San Marcos region in the same month.
Strategic Timing for Buyers:
Potential homebuyers might find favorable opportunities during the traditionally slower fall and winter months. Zillow's market index indicates a reduction in competition across major U.S. metro areas from October to November, a trend that could benefit Austin buyers. Notably, only 10.4% of homes in the Austin area sold for more than their listing price in October, suggesting a buyer's market.
Zillow's Chief Economist, Skylar Olsen, advises, "Those shopping this winter have plenty of time to choose and a relatively strong position in negotiations." This period may allow buyers to negotiate contingencies related to inspections or repairs and potentially avoid bidding wars.
While the Austin real estate market is set for modest growth in 2025, strategic planning and timing could offer advantageous opportunities for buyers and sellers alike. Staying informed and working with knowledgeable real estate professionals will be key to navigating this evolving market landscape.
This analysis is based on insights from CultureMap Austin's article, "How Austin fits into Zillow's predicted housing market growth in 2025."