Central Texas Home Sales Increase in First Half of 2019, Decrease in Austin

Single-family home sales experienced strong gains in the Austin-Round Rock Metropolitan Statistical Area (MSA) but declined in the city of Austin in the first half of this year, according to the Midyear 2019 Central Texas Housing Market Report. The thought process is that Austin’s limited housing inventory (under 2 months) and increasing home prices are resulting in fewer sales in Austin proper, as folks get pushed out to the suburbs. The suburbs are benefitting from the demand and providing better affordability. I’ve seen this with my own clients who have found some wonderful homes once we pushed out from the core Austin area.

This June, single-family home sales activity increased 0.5% year over year to 3,349 sales. During the same period, the median price for a single-family home rose 3% to $334,702. Monthly housing inventory decreased 0.2 months year over year to 2.7 months, well below the Real Estate Center of Texas A&M University's benchmark of 6.0 months as a balanced housing market. In the first half of the year, Austin area single-family home sales increased 4.3% year over year to 16,203 home sales, while the median home price increased 1% year over year to $315,000. The volume of homes on the market and pending sales activity increased during the same period. From January to June 2019, new listings increased 1% to 22,047 listings; active listings increased 4.8% to 6,282 listings; and pending sales rose 7.9% to 18,180 pending sales. Sales dollar volume in the Austin-Round Rock MSA was $6,439,059,121-a 6% increase from the first six months of 2018.

In the city of Austin, single-family home sales in the first half of the year decreased 1.6% year over year to 4,736 sales, while the median price for a single-family home rose 3.2% to $387,100. During the same period, new listings decreased 3.4% to 6,249 listings and active listings decreased 5.7% to 1,215 listings; pending sales edged upward by 0.2% to 5,229 sales. In June, the city of Austin home sales decreased 2.3% to 985 home sales as the median price experienced a double-digit percent increase of 10.9% to $420,000. Housing inventory decreased 0.2 months to 1.9 months of inventory, and homes spent an average of 30 days on the market.

(information courtesy of ACTRIS)

National Market Update

The National Association of Realtors (NAR) Pending Home Sales index of contracts signed on existing homes rose 2.8% in June, up 1.6% year-over-year. This ends 17-months of annual declines. The NAR's chief economist sees a positive trend: "Job growth is doing well, the stock market is near an all-time high and home values are consistently increasing... combined with the incredible low mortgage rates..." Housing inventory should be boosted by the Fed rate cut from last week, even if it won't directly affect mortgage rates. Lower rates should cause construction to be more affordable and help offset the cost of labor and material rising.

In Freddie Mac's Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate matched last week's, near a three-year low. Freddie Mac's chief economist expects "stronger housing starts and increased home sales for the remainder of the year as homebuyers benefit from very attractive mortgage rates, lower prices at the gas pump, plus a gradual bump up in wages."