According to the Austin Board of REALTORS® May 2022 Central Texas Housing Market Report, active listings experienced triple digit percentage growth year over year and inventory rose to over one month of inventory for the first time in seven months. The data indicates the market is calming as typical seasonality is returning in terms of the number of closings, even as sales dollar volume sustained a positive lift.

“The strength of our evolving housing market remains a very important part of Austin’s economy,” Cord Shiflet, 2022 ABoR president, said. “The increase in inventory that we’re seeing is helpful for buyers who have had a hard time finding a home these past two years. However, REALTORS® continue to see homes selling faster than ever before, so working with a REALTOR® is a buyer’s best bet in helping navigate the opportunities in our market.”

Last month across the MSA, residential home sales declined 6.7% year over year to 3,633 closed sales as the median price rose 19.6%, maintaining the all-time record of $550,000 set in April 2022. Sales dollar volume grew 9.0% to $2,482,046,786 while new listings also increased 18.8% to 5,231 listings, and homes spent an average of 15 days on the market, a day less than May 2021. Active listings skyrocketed 146.2% to 4,173 listings, causing housing inventory to more than double to 1.2 months of inventory, up 0.7 months from last May, as pending sales declined 12.5% to 3,643 transactions.

Dr. Adam Perdue, a research economist at the Real Estate Center at Texas A&M University, offered his insight into the current state of the market.

“The Austin region saw dangerously low levels of inventory, as low as 0.4 months of inventory in January 2021, so this slight increase in inventory and active listings point to the market beginning to normalize. While year over year price increases will continue to remain high, we project them to fall slightly lower than the long-term trend we’ve monitored over the past two years.”

Perdue added that the affordability issues Austin is facing does not point to the housing market collapsing or a bubble bursting.

“The Austin housing market has experienced a multitude of factors that have influenced its current state, one of those being the high influx of companies and individuals migrating to the area both from within Texas and out-of-state, which has contributed to a strong and diverse economy attractive to people seeking opportunity. These migrations of individuals and companies will continue to happen, especially as Austin is relatively affordable compared to some outof-state markets when it comes to owning a home and operating a business. Given this growth and continued increases in prices, the sales decline appears to be more likely a supply issue than a demand one and does not indicate a bubble bursting.”

Real estate bubbles occur when speculation overtakes a market and prices rise not because demand for housing is increasing, but because buyers believe prices will continue to rise in the near future, increasing the value of their investment and presenting the potential to flip properties quickly. That type of speculation is not what is driving housing demand or price increases in the Austin-Round Rock MSA.

“Historically Austin has not built enough housing to keep up with the demand of the market. ABoR is committed to finding solutions to the challenges our region is facing which is why we are excited to host a mid-year housing summit in July, in partnership with the Austin Chamber of Commerce. The event will cover housing perspectives in home buying and selling, development, leasing and property management and housing equity and affordability,” Shiflet said.

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A new study by the National Association of REALTORS (NAR) found that between 2010 and 2020, nearly 980,000 households shared $2.1 trillion in housing wealth. How did they do it? Time and patience.

NAR defines a middle-class homeowner as one earning an income of over 80% to 200% of the area median income in markets with 50,000 or over middle incomers. If they purchased in 2010 at $162,600, they were likely to accumulate $229,400 in housing wealth, 86% of which is attributable to price appreciation over time. Within these markets, median single-family residences appreciated by 8.3%.

The top 10 rising middle-income housing markets were Phoenix-Mesa-Scottsdale (103,690), Austin-Round Rock (61,323), Nashville-Davidson-Murfreesboro-Franklin (55,252), Dallas-Fort Worth-Arlington (53,421), Houston-The Woodlands-Sugarland (52,716), Atlanta-Sandy Springs-Roswell (48,819), Orlando-Kissimmee-Sanford (35,063), Portland-Vancouver-Hillsboro (34,373), Seattle-Tacoma-Bellevue (31,284) and Tampa-St. Petersburg-Clearwater (28,979).

Another word for housing wealth is equity – the percentage of ownership you have in your home as opposed to the bank. When the housing market is good, it raises the value of your home because homebuyers want homes like yours. You can also build equity by paying down your mortgage, making extra payments toward your principal, and making attractive improvements to your home.

Housing typically increases in value by two to three percent annually, so the record gains of the past few years are atypical. However, housing inflation plus mortgage interest rates well below overall inflation are inspiring homebuyers to leap into the market. While quick gains are possible, the buy and hold strategy works better for most homeowners.

As Russia’s invasion of Ukraine continues, the real estate industry in the U.S. is beginning to ask questions. How will the war affect the economy and how will it impact the housing market? At the very least, global conflict is unnerving, but is there hidden opportunity for American homebuyers?

According to REALTOR Magazine, stocks and cryptocurrency have been volatile. As sources of payment for homes, these may impact the luxury real estate market the most. Inflation is at a 40-year high, and only likely to get worse. Household budgets are already being tested with rising oil, gas and food prices. Rents, home prices and new construction are more expensive. Lumber prices have soared 40% in the last year. Higher mortgage rates will slow homebuying demand, explained Robert Dietz, chief economist for the National Association of Home Builders.

When consumers at any level get nervous, they tend to curtail spending, particularly for large purchases like homes. “The impact on the U.S. housing markets from the Russia-Ukraine conflict has been muted so far,” George Ratiu, manager of economic research at Realtor.com, told Fortune.com. But an escalation of the European crisis could lead to more trade route and supply chain problems and higher prices, he said.

As investors reallocate their portfolios toward U.S. Treasuries, it could cause interest rates to fall. But if oil prices remain above the $100/barrel level, inflation continues, and interest rates and adjustable rates increase, the impact on the housing market could be negative, causing home sellers to lower prices.

It’s time for fun in the sun, and not too late to make some improvements to your deck. Before you have family and friends over for summer barbeques, take a weekend to make your deck more attractive, comfortable and better integrated with your backyard.

You want your deck and yard to look like they flow together. One way to do that is to plan around what you’d like to view, such as side gardens with flowers. The deck steps can lead down to the landing area or pavers in the grass that allows you and your guests to walk around and admire the plants up close.

Just as you want to orient your deck to pleasing views, you want to block out views that aren’t as nice. It’s easy to add screens, outdoor curtains or lattices so that you can enjoy the fresh air with more privacy. BobVila.com recommends adding a pergola to the deck. It’s a regal touch and the open slats of the roof will still allow airflow.

Lowes.com says to plan your deck for how you’ll use it. Is the space large enough for a barbeque, portable fireplace, or hibachi? Do you want to dine outdoors? You can buy outdoor dining furniture or build in a banquet. You can also add bench seating to one side. Anything that’s built-in and well-cared-for will add value to your home.

Top off the new look with planters for pops of color. And don’t forget soft lighting for evenings.

If you’ve been anxious about being able to buy a home, you’ll like the latest news in March 2022 from the National Association of REALTORS (NAR) and the Mortgage Bankers Association (MBA). Housing sales are slowing down.

In February 2022, existing home sales were down 2.4% from one year ago and down 7.2% from January. Supplies of listed but not-yet-sold homes totaled 870,000 units, up 2.4% from January, but remain 15.5% lower than a year ago (1.03 million.) The supply is 1.7 months at the current sales pace, up from 1.6 months on hand in January.

As interest rates cross the 4% threshold and prices continue rising, monthly house payments have risen by 28%, says NAR Chief Economist Lawrence Yun. The median existing-home sales price rose to $357,300, up 15.0% from a year ago ($310,600), marking 120 consecutive months of year-over-year price increases. This is the longest-running streak on record, according to NAR.

Rising interest rates are conflating with rising home prices, which is impacting new home construction and sales. With mortgage interest rates a full point higher than they were a year ago, applications to purchase a new home were down for the third consecutive month, hitting the lowest sales pace in seven months at 791,000 units. And the MBA Builder Application Survey showed that mortgage applications for new home purchases decreased 3.9% year-over-year in February 2022.

The good news is you may be able to get a proverbial foot in the door soon.