May 2022 Data Deep Dive
✨2 CAMPS EMERGING✨
Over the last couple of weeks two camps have started to emerge:
👉 The first says the Sky is Falling and we are in for a day of reckoning like 2008.
👉The second camp acknowledges there is an adjustment happening, but this had to happen. Free money was not always going to be there (rates would eventually go up), inventory needed to increase and 20%+ YOY appreciation would not last forever.
The lending guidelines are far more stringent than 2008 ~ large down payments, many programs required significant cash reserves after closing, and I've seen no zero down / rolling in closing costs to your loan situations. I worked thru this cycle, the lead up to it and the eventual recovery (which Austin was one of the first to emerge).
We are going to see what look like alarming inventory levels, and I'm watching those carefully, but for nearly 2 years we have not been able to discuss home inventory using the traditional measuring stick of months. Rather we were looking at weeks and sometimes days. So if you double or triple inventory from .5months (that's 1/2 a month or 2'ish weeks) to almost 2months that headline is scary. WE DOUBLED INVENTORY!!! ⛈⛈
These new levels are taking us back to what the scene looked like in 2018-2019, and we all thought that was a hot market in Austin. Albeit rates were lower and so were prices.
I'm not ignoring the signals / data, we have some relevant things to be watching. After all the companies, jobs, and people relocating to Austin & Central Texas, would you bet against our 2, 5, 10 year future, or do you believe our specific economic environment looks healthy in the foreseeable future? Think about the footprint Apple, Oracle, Samsung, Tesla, VRBO, Meta, Dell (don’t forget ole Dell!) ….then think about all the small to medium sized companies who follow these large corporations and do business with them. 🤔
DM or call for a conversation at large about how the balancing in our market might impact your plans.