Austin Redfin agent Maggie Ruiz the pandemic homebuying boom drove home prices up so significantly that the area has become unaffordable for many locals. She also noticed that migration into the Austin area and investment purchases are slowing significantly.
“Even though affordability is a concern, in many ways we are in a buyer’s market,” Ruiz said.
“Some first-time buyers finally have an opportunity to purchase a home without competing with out-of-towners and investors. Because prices and rates are high, a lot of buyers are offering below asking price, negotiating with sellers on a rate buydown, or considering new construction because many builders are offering significant incentives, including rate buydowns, to offload their inventory,” the agent added.
West Coast tech hubs have also seen price growth decelerate rapidly, Redfin found.
San Jose, Calif., Oakland and Seattle all made it onto Redfin’s top 10 list where price-per-square-foot ha fallen most dramatically. Median price per square foot fell about 2% in San Jose in October, down from 20% growth in February.
“Buyers in the ultra-expensive bay area and Seattle markets are feeling the sting of high mortgage rates and stumbling tech stocks even more than the rest of the U.S. That makes continued double-digit home-price growth unsustainable,” the firm said.
Meanwhile price growth is speeding up in some affordable East Coast and Midwest areas, according to Redfin.
For instance, “the median price per square foot was up 11.2% year over year in Albany, N.Y., in October, up from a 2.8% increase in February. That’s the biggest price acceleration of the metros in this analysis. It’s followed by Bridgeport, Conn., where price per square foot grew 7.5% in October, up from 4% in February, and McAllen, Texas,” which saw an 18.7% jump, up from 16.1% in February.
All five of the metros where price growth has accelerated this year as the nationwide housing market cools “are affordable places with relatively stable local markets,” Redfin said. Four of the five have median home prices below the national median, while Bridgeport is the exception.
“Prices in those places grew during the pandemic, but they didn’t skyrocket like much of the rest of the country, so there’s not nearly as much room to fall,” Redin said.
In additions, locales like Albany and McAllen “feel the impact of high mortgage rates less than other areas, as the lower the home price, the lower the dollar impact on monthly mortgage payments,” the company reported.