New home prices are dropping in the Austin area. If you’ve been waiting for prices to fall, this is your lucky moment.
I can’t tell you how many buyers I’ve spoken too over the last two years who said, “I’m just going to wait until prices come back down.” They were dismayed in the fact the Austin prices went up 70% in the last couple of years or so.
You’ve probably seen the articles how the housing market across the U.S. is experiencing a shift. For the last three years we’ve been in an unprecedented strong seller’s market here in Austin. It started in the resale market and bled over into new construction.
By the beginning of 2021 builders ran out of homes, lots, and anything at all to sell. As a Broker I couldn’t find a new home opportunity for buyers anywhere in our area. Builders started adding buyers to waiting lists. New communities would have hundreds on a wait list which quickly became frustrating to buyers and builders.
Next, builders started building inventory homes and making them available to potential buyers on their list. They discovered the a single buyer had put their name on multiple builder’s list and some dropped out all together. New buyers coming into the market and were frustrated to hear, “We’ve got 200 people on our list in front of you.” New home prices kept escalating.
The waiting list approach went away. The next strategy was the builders would pick the lot, pick the floor plan, pick the options, and start building the home. When the home was 3-4 months from completion they would release it for sale. Some builders created bidding wars selling a $500,000 home for $100,000+ above the asking price. New home prices kept escalating.
Then a few months ago mortgage rates starting going up. Lots of buyers were priced out of the market. Builders inventory keep increasing.
Now with the fear or recession, more buyers dropping out of the market, builders are terrified of a housing market decline. Consequently, builders the releasing lots, inventory homes, and homes under construction at reduced prices and with increased incentives.
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