Austin Real Estate Update | October 2020
I truly hope this finds you healthy and in good spirits. Please think of me should you or your friends/associates have any real estate needs or questions, I'm never too busy to help. This edition features the most recent market updates as well as Austin news and events - Enjoy!
AUSTIN, Texas—As the summer-selling season comes to a close, the Austin Board of REALTORS® (ABoR) latest Central Texas Housing Market Report indicates the Austin-area housing market continues to exhibit strength, despite economic setbacks amid the ongoing pandemic. The Austin-Round Rock MSA posted robust gains this August, as home sales experienced a double-digit increase of 12.9% year over year to 4,019 sales.
In addition to an increase in home sales across the five-county MSA, sales dollar volume jumped 35.3% to $1,889,382,006, and the median price rose 11.3% to $355,000. New listings slightly increased 1% to 3,862 listings, and pending sales soared 40.1% to 4,533. At the same time, active listings dropped 44.9% to 4,257 listings.
Personal take - August statistics showing that double-digit increase paired with active listings dropping by nearly half is creating even lower inventory than all the low inventory I've been talking about for month. It's still an abundance of multiple offer situations, a strong indicator that there are more buyers and than the inventory will accommodate. This is all driving home prices up, and the low interest rates are helping the buyers to have more buying power. It's a very competitive market. What is driving the buying? Working from home. It's the same reason that home improvement companies are seeing massive growth in sales
Homes across the MSA spent an average of 42 days on the market, 10 days fewer days than August 2019, and housing inventory decreased 1.2 months to 1.4 months of inventory, well below the Real Estate Center at Texas A&M University’s benchmark of 6.0 months to maintain a balanced housing market. Mark Sprague, state director of information capital at Independence Title, said that although Austin-area home sales dipped in the early Spring, the region’s real estate market as a whole has endured. "It’s safe to say that August numbers solidify that Austin’s housing market has fully rebounded, and, as long as we continue to see more job creation, we’ll likely see strong home sales throughout the remainder of the year. However, we started this year with a lack of inventory, and we’re going to end this year with a lack of inventory. Inadequate housing stock is going to be the main issue that holds the market back." In the city of Austin, critically low levels of inventory drove the median home price up 14.9% year over year to $435,000—an all-time high for any month on record. Residential sales barely increased 2.4% to 1,240 sales, as sales dollar volume jumped 19.9% to $682,748,453. During the same period, new listings increased 4.8% to 1,318 listings, active listings decreased 26.6% to 1,468 listings, and pending sales increased 20.6% to 1,314 pending sales. Monthly housing inventory decreased 0.5 months year over year to 1.5 months of inventory. At the county level, residential sales increased 9.2% to 2,015 sales, while sales dollar volume spiked 39.9% to $1,182,976,984. The median price for residential homes increased 19.2% year over year to $430,000. During the same period, new listings slightly increased 1% to 2,046 listings, while active listings declined 41% to 2,253 listings. At the same time, pending sales rose 34.6% to 2,229 pending sales. Monthly housing inventory decreased 1.1 months year over year to 1.4 months of inventory. (information courtesy of ACTRIS)
National Market Update The National Association of Realtors Chief Economist says housing market activity is “now outperforming” 2019. He adds there will eventually be a vaccine which will boost the economy, so he projects home sales will rise 8% in 2021. Realtor.com's Housing Market Recovery Index is now ahead of its pre-shutdown baseline nationwide. All four regions and 43 of the 50 largest markets are now above that recovery benchmark. New Home Sales in August up past one million units a year for the first time since 2006. Sales are now up 30.6% from pre-pandemic January and 43.2% ahead of a year ago. Existing Home Sales passed the 6 million a year mark in August, also for the first time since 2006. After three straight months of gains, they’re now 4.2% above their February high, up 10.5% from a year ago. Single-family starts rose 4.1%, and are now up 12.1% from a year ago. Building Permits overall slipped a mere 0.9% in August, but single-family permits gained 6.0% and are up 15.6% versus a year ago. Home builder confidence hit 83 in September, a 35-year high so the increases are not a surprise. The Mortgage Bankers Association reports purchase applications up 3% for the week and up 40% from a year ago, the 16th straight week of annual gains, while Q2’s $1.1 trillion in mortgage volume set a new record. First American reports a 15% increase in house-buying power—how much home one can afford to buy given household income and the prevailing mortgage rate. They credit low mortgage rates and continued income gains.
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