Latest news with #RiversideHomes
Newsweek
24-04-2025
- Business
- Newsweek
Austin's Housing Market Is in Trouble
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. After having pulled through a dramatic home price correction over the past couple of years, the former pandemic boomtown of Austin, Texas, is now navigating even more troubled waters, as buyers scared off by brewing economic uncertainty are failing to show up for the city's growing housing supply. "Our market here was showing signs of price stabilization after unprecedented declines, as buyers re-entered the market after the 3 percent interest rate 'hangover' finally wore off at the beginning of the year," Scott Turner, founder of Austin-based Riverside Homes, told Newsweek. "But the economic uncertainty caused by tariffs and the risk of recession definitely affected their mentality, making them more cautious and leaving housing inventory levels at nearly an all-time high." The downtown skyline on April 11, 2023, in Austin, Texas. The downtown skyline on April 11, 2023, in Austin, It Matters Between February 2020 and May 2022, the median sale price of a home in Austin jumped by more than 60 percent, according to Redfin data, reaching a peak of $659,500. The increase was mainly a result of the massive influx of out-of-state newcomers sparked by the rise of remote work, which allowed many Americans to relocate to more affordable, more livable cities and turn their back on expensive metropolises. But the Austin housing market, which had become one of the most overheated in the country, experienced a significant slowdown after the pandemic, with return-to-office orders affecting the number of people relocating to the Texas capital. With a few notable exceptions, home prices have been consistently falling in the city, year-over-year, since late 2022. The City's Boom And Bust "The story of the Austin housing market is basically the same as the national story, just a bit more dramatic," Austin-based Joel Berner, senior economist at told Newsweek. "Following the peak of the pandemic, there was a major run-up in home prices amid record-low mortgage rates as buyers rushed to snatch up homes." Eldon Rude, a longtime housing market analyst based in Austin, told Newsweek: "Texas was one of several Sun Belt states that experienced significant in-migration between 2020 and 2022, which resulted in an imbalance in demand over supply for homes. "Such strong demand, coupled with extremely low mortgage interest rates, resulted in significant increases in home prices in all of the major metropolitan areas in the state." The median listing price in the city jumped from $369,745 in April 2020 to $625,000 in April 2022, an uptick of 69 percent in just two years. At the same time, inventory plummeted, though it quickly recovered to pre-pandemic levels by 2023. "Since then, inventory has continued to grow year-over-year, and March 2025 had more active for-sale listings in Austin than any March in our data history," which dates to March 2017, Berner said. But buyers are not exactly jumping on the chance of buying a home, even with more options available on the market. "Just because home prices are coming down and there are more listings, doesn't mean that prices are affordable. So there's still a supply problem in cities like Austin," Turner said. "I think only 25 percent of Austinites can afford to purchase a home at the median home price." Rude said: "With interest rates now higher than they were prior to COVID, coupled with a slower economy and less in-migration into the state, there are now fewer buyers in the market, and what buyers there are face affordability challenges given elevated home prices as well as higher mortgage payments." Berner said: "The supply growth has softened prices, and the median listing price in March 2025 was $510,000, down 7.2 percent from March 2024. It has been a slow year, with 12 consecutive months of prices falling year-over-year. The correction has come for Austin sooner and more significantly than the national housing market." According to Turner, home prices are now stabilizing after "an unprecedented drop." Despite a gloomy outlook for the city's housing market's short-term future, Turner said Austin's economy remains robust. "Our real estate market is returning to a 'new normal' in terms of supply and demand," he said. That is—as long as the Trump administration's tariffs do not massively disrupt the city's market even further. "Austin's economy outside of real estate is fairly diversified and still strong, but neither Austin nor Texas are immune to the impacts of a recession or tariffs, in the case of home building," he said. "It will take time for our market to work through this inventory, but despite Austin's growth, much of this inventory remains unattainable for most Austinites, particularly with rates where they are, making matters worse." The Ripple Effect Of Trump's Tariffs Turner said that existing homes currently for sale on the Austin market are not going to be impacted much by the tariffs, but these are still influencing buyer behavior, making them "more cautious." For new home construction, on the other hand, "the impact of tariffs cannot be overstated," Turner said. "Significant cost increases, particularly in Texas, where we are more reliant on imported building supplies, combined with falling prices would be devastating, not just to Austin's market, but nationwide. If it gets worse, homebuilding could be the first major industry hit by 'stagflation,'" It is not only tariffs that are causing concerns among homebuilders in the U.S. and Austin—but uncertainty over whether the president would stick to these tariffs or change his mind. "As homebuilders, we can't easily adjust our business to such sudden changes," Turner said. "We are getting notices from suppliers every week regarding price increases." Berner said that the direct effect of tariffs on the Austin housing market has not yet been felt, "but as an area with strong new construction activity, the tariffs on Canadian lumber especially will work to drive up the cost of newly built homes in the Austin metro." In recent years, the economist explained, builders in Austin have excelled at delivering affordable new inventory to the city's market, and the median price of a new home in Austin is currently lower than the price of existing homes. That is due primarily to where the new inventory is being built, Berner specified, in outlying areas of the metropolitan area. "This will be jeopardized by tariffs, as builders will be forced to pass on additional costs to new home buyers," Berner said. "What we will see even sooner is the indirect effect of the tariffs on consumer confidence, dampening demand for home purchases and leading to another slow year of home sales in Austin. "Unless mortgage rates drop significantly, we anticipate that depressed homebuyer sentiment will lead to continued price depreciation and low volume of home sales in Austin."
Yahoo
06-04-2025
- Business
- Yahoo
Builders sitting on a pile of unsold homes are slashing prices and offering mortgage rate deals
Homebuilders are sitting on the most unsold homes since the depths of the Great Recession, giving buyers a chance to snag deals — provided they're in the right part of the country. As of February, builders had completed some 119,000 homes that weren't yet sold. To lure buyers, they're dangling incentives like mortgage rate buydowns, closing cost credits, and money toward upgrades. In some cases, they're slashing prices altogether, something they usually try to avoid because it hurts earlier buyers. Most large builders aim to sell homes before they finish the construction. But they also typically build at least some properties 'on spec,' without a buyer lined up. Spec properties, often called 'move-in ready' or 'inventory homes' by the industry, appeal to buyers who can't wait months before they move and can help builders manage their costs during uncertain times. Inventory has been steadily growing since early 2022, after builders that rushed to meet pandemic-driven demand ran up against higher mortgage rates and worsening affordability that shut out potential buyers. While that means the market has turned in buyers' favor now, it may not last. Many builders are now slowing down construction activity while they clear their backlog. 'We fell pretty far in terms of prices,' said Scott Turner, the owner of Riverside Homes, a spec builder in Austin, Texas. He estimates that home prices in the urban parts of the city where he focuses dropped 30% from their peak to their trough. 'That's left builders with inventory that's very difficult to sell. What that does, obviously, is have a chilling effect on new starts.' Read more: How to get the lowest mortgage rates in 2025 In Killeen, Texas, about an hour north of Austin, real estate agent Stephen Harris has seen new construction homes in the suburbs sell for $50,000 less than what comparable units fetched in 2022. Builders are offering mortgage rate buydowns of 1 to 2 percentage points, which has steered some of his clients toward new construction even if they were initially targeting older homes. 'People find themselves nervous about getting into one of these newer homes,' Harris said. 'But I think the incentives and buydowns, all of that is enough to sway a lot of people because it makes it attainable.' Khadija Najmi, a project manager at a financial services company, recently moved into an inventory home constructed by a large builder in San Antonio. She and her husband, who were relocating from the Dallas area to be closer to family, toured older homes but landed in new construction in part because they received a mortgage rate buydown to 4.99%. With the rate savings, they were able to afford a bigger property. 'It makes a huge difference in what you can afford and what you can't if you have a different interest rate,' said Najmi, 32. Since she moved in in February, though, she's had mixed feelings about purchasing a spec home. She and her husband received $30,000 off the house's list price, plus free appliances and window shades, and it has many features she was looking for, like spacious his-and-hers closets and recessed lighting. But she was frustrated to find construction defects like a kitchen sink tap that sprays water wildly, a broken doorbell, and a leaky garbage disposal. She's wondered if waiting longer for a custom home would have prevented some of those issues. In the meantime, homes are still going up in the lots around hers. 'In two days, the foundation is already laid out, and the lumber is already laid out. It's almost like a house,' she said. 'They're being built very fast.' Read more: 2025 housing market: Is it a good time to buy a house? While inventory — and buyer incentives — remain plentiful in Texas, Florida, and states like Arizona that have seen some of the most aggressive building in recent years, the broader housing landscape looks far different than when inventory last reached these levels in 2009. Homes are still in short supply in many other parts of the country, and there, competition is fierce. 'In top big markets like coastal California, inventory is incredibly tight,' said Ali Wolf, chief economist at data provider Zonda and New Home Source. 'There's no developable land. There's no resale supply. The run-up in supply does not apply much to the West Coast. It does not apply that much to the Midwest.' Builders are likely also building more spec homes for strategic reasons. More buyers are seeking quick move-in options to avoid dealing with mortgage rate uncertainty, Wolf said. And some builders may be inclined to build more now to help deal with uncertainty around tariffs and labor costs, said Dillan Krieg, a senior research analyst at John Burns Research and Consulting. 'If they build on a spec basis, they're able to manage their costs and hedge against some of those hits from tariffs,' Krieg said. Trump's latest tariffs carved out several key building materials like lumber, and also exempted Canada and Mexico — two key trading partners for builders — from further levies. Still, the industry is bracing for construction costs to rise, and economists expect that some would-be homebuyers may delay purchases amid growing economic uncertainty. Zonda's recent homebuilder surveys found that around 90% of them were worried about tariffs. But builders generally say they have no choice but to figure out how to deal with the changes. 'The comments are, 'I'm worried, but what can I do about it?' Wolf said. ''I just have to learn to adapt, if this is what our new reality is.'' Still, builders with large amounts of inventory they hope to clear are in a tough spot, Krieg said. Incentives like rate buydowns will likely remain a key strategy to get customers in the door. 'Builders really do not have a lot of pricing power right now,' he said. Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance. Sign up for the Mind Your Money newsletter
Yahoo
06-04-2025
- Business
- Yahoo
Builders sitting on a pile of unsold homes are slashing prices and offering mortgage rate deals
Homebuilders are sitting on the most unsold homes since the depths of the Great Recession, giving buyers a chance to snag deals — provided they're in the right part of the country. As of February, builders had completed some 119,000 homes that weren't yet sold. To lure buyers, they're dangling incentives like mortgage rate buydowns, closing cost credits, and money toward upgrades. In some cases, they're slashing prices altogether, something they usually try to avoid because it hurts earlier buyers. Most large builders aim to sell homes before they finish the construction. But they also typically build at least some properties 'on spec,' without a buyer lined up. Spec properties, often called 'move-in ready' or 'inventory homes' by the industry, appeal to buyers who can't wait months before they move and can help builders manage their costs during uncertain times. Inventory has been steadily growing since early 2022, after builders that rushed to meet pandemic-driven demand ran up against higher mortgage rates and worsening affordability that shut out potential buyers. While that means the market has turned in buyers' favor now, it may not last. Many builders are now slowing down construction activity while they clear their backlog. 'We fell pretty far in terms of prices,' said Scott Turner, the owner of Riverside Homes, a spec builder in Austin, Texas. He estimates that home prices in the urban parts of the city where he focuses dropped 30% from their peak to their trough. 'That's left builders with inventory that's very difficult to sell. What that does, obviously, is have a chilling effect on new starts.' Read more: How to get the lowest mortgage rates in 2025 In Killeen, Texas, about an hour north of Austin, real estate agent Stephen Harris has seen new construction homes in the suburbs sell for $50,000 less than what comparable units fetched in 2022. Builders are offering mortgage rate buydowns of 1 to 2 percentage points, which has steered some of his clients toward new construction even if they were initially targeting older homes. 'People find themselves nervous about getting into one of these newer homes,' Harris said. 'But I think the incentives and buydowns, all of that is enough to sway a lot of people because it makes it attainable.' Khadija Najmi, a project manager at a financial services company, recently moved into an inventory home constructed by a large builder in San Antonio. She and her husband, who were relocating from the Dallas area to be closer to family, toured older homes but landed in new construction in part because they received a mortgage rate buydown to 4.99%. With the rate savings, they were able to afford a bigger property. 'It makes a huge difference in what you can afford and what you can't if you have a different interest rate,' said Najmi, 32. Since she moved in in February, though, she's had mixed feelings about purchasing a spec home. She and her husband received $30,000 off the house's list price, plus free appliances and window shades, and it has many features she was looking for, like spacious his-and-hers closets and recessed lighting. But she was frustrated to find construction defects like a kitchen sink tap that sprays water wildly, a broken doorbell, and a leaky garbage disposal. She's wondered if waiting longer for a custom home would have prevented some of those issues. In the meantime, homes are still going up in the lots around hers. 'In two days, the foundation is already laid out, and the lumber is already laid out. It's almost like a house,' she said. 'They're being built very fast.' Read more: 2025 housing market: Is it a good time to buy a house? While inventory — and buyer incentives — remain plentiful in Texas, Florida, and states like Arizona that have seen some of the most aggressive building in recent years, the broader housing landscape looks far different than when inventory last reached these levels in 2009. Homes are still in short supply in many other parts of the country, and there, competition is fierce. 'In top big markets like coastal California, inventory is incredibly tight,' said Ali Wolf, chief economist at data provider Zonda and New Home Source. 'There's no developable land. There's no resale supply. The run-up in supply does not apply much to the West Coast. It does not apply that much to the Midwest.' Builders are likely also building more spec homes for strategic reasons. More buyers are seeking quick move-in options to avoid dealing with mortgage rate uncertainty, Wolf said. And some builders may be inclined to build more now to help deal with uncertainty around tariffs and labor costs, said Dillan Krieg, a senior research analyst at John Burns Research and Consulting. 'If they build on a spec basis, they're able to manage their costs and hedge against some of those hits from tariffs,' Krieg said. Trump's latest tariffs carved out several key building materials like lumber, and also exempted Canada and Mexico — two key trading partners for builders — from further levies. Still, the industry is bracing for construction costs to rise, and economists expect that some would-be homebuyers may delay purchases amid growing economic uncertainty. Zonda's recent homebuilder surveys found that around 90% of them were worried about tariffs. But builders generally say they have no choice but to figure out how to deal with the changes. 'The comments are, 'I'm worried, but what can I do about it?' Wolf said. ''I just have to learn to adapt, if this is what our new reality is.'' Still, builders with large amounts of inventory they hope to clear are in a tough spot, Krieg said. Incentives like rate buydowns will likely remain a key strategy to get customers in the door. 'Builders really do not have a lot of pricing power right now,' he said. Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance. Sign up for the Mind Your Money newsletter Sign in to access your portfolio
