Good afternoon, and thank you for subscribing to Building Austin, our weekly newsletter focused on real estate, growth and development in the Austin region. I’m Shonda Novak, the American-Statesman’s real estate reporter.
“There’s so much uncertainty right now regarding the impact tariffs will have on the local economy and our housing market, which makes any forecast of what conditions will be like over the next three to six months very tricky,” said Eldon Rude, an Austin-area housing industry expert.
Redfin, the online real estate brokerage, recently released a few housing market surveys worth noting.
The headlines are below, followed by Redfin’s key takeaways.
After that, ready my latest story on the Austin-area housing market (linked below), which includes expert commentary about the impact of tariffs on the local market.
“The tariffs have affected the bond market, which directly impacts mortgages,” Austin real estate broker Eric Bramlett, owner of Bramlett Residential, told me. “They’ve caused turbulence in the stock market, which causes consumer confidence to go down. So, it’s a combo of fluctuating mortgage rates and bad consumer confidence affecting our local real estate market in the wrong direction.”
And now, quoting directly from Redfin’s news releases, are some of the brokerage’s latest reports. Although tied to the U.S market, many of the highlights apply to the Austin-area housing market as well.
The typical home that went under contract in March sat on the market for 47 days. Homes sold over twice that fast during the pandemic homebuying frenzy.
Homes are taking longer to sell because many are overpriced and demand is sluggish. Plus, sellers are competing with each other—the supply of homes for sale hit a five-year high in March.
Meanwhile, competition between buyers is declining; only 27% of buyers paid more than the list price — the lowest March share since 2020 — and home prices grew at the slowest pace in a year and a half.
“March marked five years since the coronavirus was declared a pandemic, and many U.S. housing metrics are returning to the levels seen just before or during the early days of the pandemic — when the housing market was moving slowly. Gone are the days of 2021 and 2022, when most home sellers were getting multiple offers and fetching more than their asking price. Now, homebuyer competition is cooling; roughly one-quarter (27%) of homes sold for over their list price last month—the lowest March share since 2020.
“Homes are taking longer to sell and attracting less homebuyer competition because supply is climbing, demand is sluggish and some properties are overpriced. The supply of homes for sale is at a five-year high because partly many homeowners can no longer hold out for lower mortgage rates; eventually, people have to move due to factors like a new job or a divorce. Meanwhile, demand is sluggish because economic uncertainty and high homebuying costs are giving house hunters pause.
“When supply is on the rise, sellers lose negotiating power because buyers have more options to choose from. Still, many sellers are trying to fetch high prices. List prices have been growing faster than sale prices, and Redfin agents report that sellers are overpricing their homes, causing them to sit on the market.
“There’s a growing disconnect between what sellers think they can get for their homes and the direction the market is actually moving,” said Redfin Senior Economist Elijah de la Campa. “Tariff fears and widespread economic uncertainty are making homebuyers nervous, so if sellers don’t lower their price expectations, home sales may slow in the coming months.”
“When supply is on the rise, sellers lose negotiating power because buyers have more options to choose from. Still, many sellers are trying to fetch high prices. List prices have been growing faster than sale prices, and Redfin agents report that sellers are overpricing their homes, causing them to sit on the market.
“There’s a growing disconnect between what sellers think they can get for their homes and the direction the market is actually moving,” said Redfin Senior Economist Elijah de la Campa. “Tariff fears and widespread economic uncertainty are making homebuyers nervous, so if sellers don’t lower their price expectations, home sales may slow in the coming months.”
“The housing market is under pressure as prospective homebuyers and sellers navigate a rapidly shifting economic landscape, with President Trump’s tariff policy, a volatile stock market and increased chances of a recession exacerbating widespread financial uncertainty.
“Tariffs are coming up for the first time. I hosted an open house…and some of the younger buyers were concerned about how they’re going to impact the housing market,” said Desiree Bourgeois, a Redfin Premier agent in Detroit. “They’re hearing the words ‘tariffs’ and ‘recession,’ and it’s making them nervous that if they buy now, the value of their home will decline, and they don’t know whether mortgage rates will go up or down. There’s a lot of uncertainty out there, with buyers trying to understand how their purchase would fit into their personal finances and the broader economic puzzle.
“The only thing that’s certain about mortgage rates and the housing market right now is extreme uncertainty,” said Redfin Economic Research Lead Chen Zhao. “With the White House going back and forth on tariffs, sending markets and rates reeling, Americans are feeling uneasy about their money. Nobody knows what will happen next. It’s likely that financial anxiety, rapidly changing economic news and the rising chance of a recession freeze the housing market. But it’s also possible that economic turmoil pushes down mortgage rates and/or people decide to bite the bullet now instead of waiting for conditions to perhaps worsen, encouraging homebuyers and sellers to jump into the market.”
The flow of U.S. residents moving into Florida, Texas and other parts of the Sun Belt slowed significantly in 2024, a Redfin news release said.
The rising cost of housing and the increasing frequency of natural disasters are slowing migration to certain Florida and Texas metros, the release said.
Citing U.S. Census data, Redfin said Austin, in particular, saw one of the biggest slowdowns in the nation with a net inflow of about 14,000 residents last year, down from about 22,000 residents in 2023. (Net inflow is how many more U.S. residents move into a metro area than move out; it includes domestic moves only).
“The rising cost of housing is one factor in slowing migration to the Sun Belt, and slowing migration is now one factor pushing homebuying demand down in those areas,” Redfin noted.
The release went on to say: “In some of the places where migration is slowing most, sale prices are either falling or they’re flat. That’s due partly to the pandemic construction boom and surging supply in Florida and Texas. There’s now a surplus of homes and apartments in parts of those states, and slowing migration — along with locals being priced out — means there are fewer people to buy them, which is one reason demand feels slow.”
“Metros like Austin were once viewed as affordable alternatives to expensive hubs like San Francisco and New York, but that gap is shrinking. As a result, those who are able to relocate may be considering other parts of the country, like the Midwest or parts of the Northeast, because they’re more affordable than the Sun Belt and less prone to natural disasters. For instance, Minneapolis and Indianapolis, where median home-sale and rent prices are lower than they are in places like Miami or Austin, are among the metro areas that saw migration rise in 2024.”
In March, home sales fell 9.3% in the Austin region compared with March 2024. The median sales price was $446,000, flat from March a year ago, according to the Austin Board of Realtors.
Within Austin’s city limits, home sales fell about 9% in March year-over-year. Half of the homes sold for $590,750 and half for less, for a 5.5% increase in the median closing price.
For more on the Austin-area housing market, check out my article here.
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