AUSTIN (KXAN) -- A senior economist for real estate company Zillow told KXAN that the Austin-Round Rock Metropolitan housing market is set to enter 2025 in a "healthier" spot than its previous "unsustainably hot" situation.
Zillow senior economist Orphe Divounguy said in a Dec. 11 interview that 2024 saw a "cooling in the housing market." The company rated the Austin-Round Rock Metro as a buyer's market in an October 2024 report.
"We're in a period of transition, and we're going to continue to see home sales continue to rebound slowly from the big trough that we had in 2023," he said. "The big surprise at the national level was the fact that we started to see some sellers return."
Divounguy's prediction for the national market in 2025? Volatility. The change in presidents has previously, and likely will again, bring tumult to housing and all markets. But prices should continue to ease over the next year.
"We'll have some mortgage rate volatility, but we expect housing sales to continue to rebound slowly but surely towards where they were before the pandemic," he said.
Austin may dodge a lot of that volatility thanks to its rapid construction. It's also one of a few cities to close an inventory gap caused by the COVID-19 pandemic.
"We're starting to see inventory in the Austin market surpass pre-pandemic levels, which is unlike what we're seeing nationwide. The number of homes for sale in Austin last month was 30% higher than it was before the pandemic," Divounguy said.
Prolific construction is just a part of the picture -- the Austin migration is slowing, easing demand on local housing.
"Austin was unsustainably hot during the pandemic," Divounguy said. "By June 2022, the combination of higher home values and the doubling of mortgage rates really pushed affordability to an all-time low. We had a lot of people moving into the Austin market, pushing up house prices."
The economist said the metro's median price has dropped significantly, making it easier for potential buyers to enter the market.
"Increasing housing supply has really kept price growth in check and help to actually lower prices in that metro. Today, potential home buyers in Austin have more options than anywhere else in the country, and are in a better place," he said. "I think it is one of the healthiest housing market in the country."
