Austin housing market on pace for record year
Central Texas could be on pace for a ninth straight year of record-setting home sales, according to new data from the Austin Board of Realtors.
Real estate agents sold 2,721 homes across Central Texas last month, the board said Thursday in its latest home sales report. That’s the most for any October on record, and a 17% jump over October 2018’s volume, the board said.
The latest numbers bolster the chances that the five-county Austin region could end 2019 with sales at an all-time high, said Kevin Scanlan, the board’s president. It would mark the ninth year in a row that annual sales surpassed the previous year’s volume.
“If Austin metro home sales continue this upward trend in November and December, 2019 will set the record for the most homes sold in the five-county” metro area, said Kevin Scanlan, the board’s president.
In a midyear forecast in July, Jim Gaines, chief economist at the Texas A&M Real Estate Center, had predicted a banner year.
Gaines said the Austin region from Georgetown to San Marcos was poised to hit new highs for both sales and prices this year as job and population growth continue to fuel the housing market, even as affordability concerns loom.
In addition to October’s home sales tally for the Austin region, several other records were shattered last month. The median home sales price in the region was $327,500, the highest on record for any October and a 7.4% increase over October 2018.
Within Austin’s city limits, the number of sales and the median price also hit records for any October on record. Sales climbed 14.5% with 835 sales, and the median price was $405,000, an 8.9% increase from October 2018.
From January through October, just over 28,000 single-family houses changed hands across the region, almost 7% more than in the same period last year.
Pending sales rose 25.2% in October, with 2,866 sales in the closings pipeline, indicating that November could be another strong month for sales in Central Texas.
Meanwhile, the supply of single-family homes in Austin dropped to an all-time October low, the board said. The city had a 1.5-month supply of homes last month, while the region’s inventory was at a 2.3-month supply. A supply of 6 to 6.5 months is considered a market in which housing supply and demand are in balance, favoring neither buyers nor sellers.
At midyear, Gaines had noted that the biggest issue in the Austin market was low inventory, particularly in the $200,000 to $400,000 price range, which accounts for 61% of the market.
In a written statement Thursday, Scanlan said the board’s latest report, released just days after officials reviewed the latest draft of the city’s revised land development code, underscores the need for more diverse housing options in the city.
“Austin can no longer sustain its current rate of growth. … The demand for housing is growing much faster than the number of homes available,” Scanlan said. “Homes are hardest to find in the urban core where people can live closer to work and transit. Therefore, we need to plan more efficiently — not just in Austin’s urban core but in transit corridors and activity centers as well.”
When the region’s housing crunch is coupled with such factors as rising apartment rents and interest rates that are a full percentage point below where they were a year ago, “the result is bound to be more sales and increasing pricing, and that’s exactly what we’re seeing in this market,” said Eldon Rude, a local housing market consultant.
Austin-area housing experts say stagnant incomes and rising home prices are trends nationally as well as locally.
“The U.S. median household can’t afford the U.S. median-priced home,” local developer Terry Mitchell, president of Austin-based Momark Development, said in a recent interview. “The great majority of nationwide incomes are relatively flat, growing at a rate far slower than housing prices.”
Last month, more than 40% of all sales in the Austin region were for homes priced below $300,000. Rude said that’s not surprising, given that what buyers can afford to pay for a home is almost always tied to their income.
“Buyers and sellers alike seem to be eager to get real estate transactions settled before the end of the year, and before the national election cycle ramps up, and that’s keeping open houses busy and buyer traffic steady,” Leberknight said.
While “the typical holiday season distractions” are keeping houses on the market a bit longer, Leberknight said, “I’m still seeing multiple offers and even an increase of new inventory. I’m educating my sellers that even if it takes three weeks to see an offer, that’s still no reason to discount a winter listing this year.”
Gabi Spreitzhofer, a real estate agent with Realty Austin, said that if a house is priced right and shows well, a buyer can expect to receive multiple offers.
“Sitting down with buyers to educate them on the home buying process — from being approved for a mortgage to the willingness to act fast when you find the right property — is a must,” Spreitzhofer said.
“I like to think of our market like fishing: If you throw the right bait in front of the right fish at the right time, then the time of day or the time of year or the condition of the weather is no longer a factor,” Humphreys said.
Tribune Content Agency