Real estate experts' hot takes for 2024

Real estate experts predict Austin's housing market will continue to stabilize while affordability will remain a concern heading into 2024.

Why it matters: Austin buyers slowed their pace in 2023 as they waited for mortgage rates to drop.

Between the lines: Major forecasters now expect rates to dip slightly, but they're not likely to decline enough to see a significant uptick in demand for homes, according to Clare Losey, housing economist for the Austin Board of Realtors.

• "While we may see a slight fluctuation in home prices to the tune of 5% year over year, they will essentially remain flat, and we can also expect this in home sales," Losey said.

By the numbers: Average home prices have continued to creep down since pandemic highs.

• The median home price in greater Austin hovered around $424,450 in November, an 8.4% year-over-year drop, according to the Austin Board of Realtors' latest housing market report.

Yes, but: The lack of affordable inventory of homes for sale, especially below $300,000, will continue to keep many would-be first-time buyers on the sidelines, Losey said.

• Around 7% of active listings in the Austin area were under $300,000 as of November, according to the Austin Board of Realtors.

What they're saying: This year "will likely be slightly more favorable toward sellers, especially those who purchased their homes prior to the COVID-19 pandemic," Losey said. "Although home prices moderated over 2023, prices remain 40-50% higher than pre-pandemic levels."

• The median home price in the Austin area was $305,000 in Nov. 2019.

Zoom in: Austin has seen housing inventory increase — now hovering around 3.7 months of inventory — which will likely lead to a slowing in new construction this year, according to Zillow senior economist Orphe Divounguy.

• "With all this new inventory coming on the market, builders might actually take a step back," Divounguy tells Axios. "I think you're probably likely to see fewer housing starts in Austin because you have so much inventory and homes under construction that are coming on the market."

The bottom line: Sellers will remain in a good position this year, and Austin's high housing inventory will give buyers a wider selection in the new year.

• "Affordability is still a challenge given where mortgage rates are," Divounguy says. "But with migrants coming from more expensive markets, Austin will still be an attractive place to be."

Get more local stories in your inbox with Axios Austin.