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- 🤠🏡 Selling Austin #23
🤠🏡 Selling Austin #23
3.5% interest rate in a growing Austin suburb 👀
Kirtana Reddy
July 12, 2024
Hi everyone! Welcome back - I hope you enjoyed the 4th of July, I am so happy you’re here.
Pay attention to the Fed Update 💰️ and a 3.5% interest rate in a growing Austin suburb 👀.
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WHAT'S INSIDE
🔢 THE DATA
June’s consumer price index data dropped yesterday - it’s finally good news. Let’s get into it:
Prices fell in June for the first time since the start of the pandemic.
Quick refresh:
CPI is consumer price index and it measures inflation as it’s felt by you in your day-to-day expenses. CPI looks at 100s of items to figure out what the specific drivers of inflation are.
June CPI dropped 0.1% which brings inflation to 3%. It is a dramatic decrease from a peak of 9.1% in 2022.
The Fed said they want inflation to be at 2% before cutting rates.
Maybe you noticed the change with falling prices for groceries, gas prices and new/used cars.
Maybe you didn’t. This is because many basic necessities are still high.
Car Insurance Inflation: 19.5%
Transportation Inflation: 9.4%
Hospital Services Inflation: 6.9%
Car Repair Inflation: 6.0%
Electricity Inflation: 5.9%
Homeowner Inflation: 5.4%
Rent Inflation: 5.1%
Food Away From Home Inflation: 4.1%
Given we are trending in the right direction and this report is better than expected - here is what a Chief Investment Officer at Regan Capital is saying:
“With another good CPI print under their belt, the window is open for the Federal Reserve to cut interest rates as early as September, and potentially again in December, assuming the inflation data continues to cooperate.”
Investors are now pricing in an 89% chance of at least one rate cut by September.
Investors can be wrong - back in January they predicted 6 rate cuts in 2024.
TLDR:
Prices fell in June for the first time since the start of the pandemic.
A rate cut might be here in September
🤠 WHAT’S HAPPENING IN TOWN
The expansion of Musk-ville:
Elon Musk is continuing to grow his footprint in the greater Austin area.
Currently he has the Boring Company and Starlink headquartered in Bastrop and the gigafactory just east of the Airport.
Up next - Neuralink.
Neuralink will move into 2200 Caldwell Lane in Del Valle - about 25 minutes east of downtown Austin. 10 minutes from the GigaFactory and 20 minutes from Austin Bergstrom. This $15 Million construction is planned to start in July and finish in May 2025.
Psst: expect housing prices to increase in Del Valle.
👀 DEAL OF THE WEEK
Musk’s entrance into Del Valle means a lot for this currently quiet Austin suburb.
With the entrance of the Boring Company and Starlink - Bastrop’s housing market has increased dramatically. The average home value in Bastrop currently is $365,000. That’s up 45% since 2020. Even more interestingly - housing prices have only fallen 4% in the past year.
We can assume Del Valle will follow a similar - but less dramatic - trajectory.
You can’t get land like this in Austin. And a 3.5% assumable mortgage sweetens the deal.
List price: $555,000
Kirtana’s suggestion: $510,000
⁉️ WHAT THIS MEANS FOR YOU
If you’re a buyer/seller/investor/renter or just interested in real estate - this weekly newsletter will help guide your decision making and help you better understand the market.
Buyer - Summer is historically the highest activity - If you know what you want, put in an offer | Seller - Stage your home | Renter - Seeing big complexes offer 6-8 weeks free |
🤤 HOUSE WORTH DROOLING OVER
You have to check out this gorgeous Travis Heights gem.
Yours for $5,325,000 🤑
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