Austin Real Estate Update | July 2021
I hope this finds you healthy and in good spirits! Summer is here and in full effect - stay cool out there. The market has continued to roll along, and there are still multiple offers for many homes, but it does feel like it is calming a bit, which is good. These are unprecedented times in Austin, and I thank you for trusting me with your real estate needs. 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!
If you take a look at the infographic below, it encapsulates the challenges in a very clear way, now that we've gotten a bit of footing and stats under our belt. Median Sales Price, Closed Sales, and Total Sales are all up dramatically, with active listings and average days on market down substantially.
The greater Austin area posted record-breaking gains in May, as the median home price reached an all-time high—for any month on record—of $465,000, while both home sales and sales dollar volume skyrocketed, according to The Austin Board of REALTORS® May 2021 Central Texas Housing Report.
Residential home sales in the Austin Round-Rock MSA once again hit a record for the month of May, increasing 48% year over year to 3,976 sales, while the median sales price jumped 42.2% year over year to an all-time-high of $465,000. At the same time, sales dollar volume increased 116.2% year over year to $2,355,132,804. Monthly housing inventory dipped 1.5 months to a critically-low 0.5 months of inventory.
This data is being compared to May 2020 numbers, a month in which stay-at-home orders were still in effect due to the COVID-19 pandemic. The pandemic greatly affected the real estate industry, causing an atypical slowdown in transactions—particularly for this time of year—which is part of the traditional selling season.
In May, active listings dropped 70.9% year over year to 1,739 listings, demonstrating how quickly homes are going under contract. Homes only spent an average of 16 days on market last month across the MSA. During the same period, new listings increased 6.3% to 4,413 listings, while pending sales rose 7.4% to 4,355 listings. For years, ABoR advocated for an increase of the local homestead exemption. Last week, Austin City Council took steps toward alleviating housing affordability challenges by unanimously passing an increase of the local homestead exemption from 10% to 20%. Horton reaffirmed that addressing affordability is of paramount importance for the organization. In the city of Austin, the median home price jumped 34.9% year over year to $566,500—an all-time high for any month on record. Home sales increased 54.5% to 1,270 sales, as sales dollar volume spiked 115.7% to $897,154,544. During the same period, new listings increased 6.6% to 1,447 listings, active listings dropped 62.2% to 630 listings, while pending sales increased 20.3% to 1,399 pending sales. Monthly housing inventory decreased 1.2 months year over year to 0.5 months of inventory. At the county level, home sales increased 53.1% to 2,009 sales, and sales dollar volume jumped 119.4% to $1,412,690,349. The median price for a home increased 41% year over year to $550,000. During the same period, new listings slightly increased 0.3% to 2,172 listings, active listings declined 67.5% to 945 listings, and pending sales increased 8.9% to 2,105 pending sales. Monthly housing inventory decreased 1.4 months year over year to 0.5 months of inventory. (information courtesy of ACTRIS)
National Market Update Housing Starts shot up 3.6% in May, to a 1.572 million annual rate. Lumber and labor issues have kept things volatile month-to-month, but the 12-month moving average has construction growing at the fastest pace since 2007. Although Building Permits were down for the month, they hit a 1.681 million annual rate and have outpaced new construction 15 straight months. The backlog of projects stands at its highest reading since 1999. Plus, lumber prices are dropping. The price of lumber futures for July delivery is down about 40% from last May's record highs. The builder sentiment index stays above 80, a level never reached in the indicator's history until late last year. Thanks to a lack of completed homes, New Home Sales fell 5.9% in May. Yet the 12-month moving average put sales at the fastest pace since 2007, and the inventory of completed homes rose for the first time in 13 months. Existing Home Sales fell for the fourth straight month in May but only by a mere 0.9%, and they’re still at a healthy 5.8 million annual rate. The problem is low supply, but inventories rose 7.0%, up for the third month in a row. With supply levels rising, the housing market may be starting to normalize. The latest ShowingTime data reports a dip in May home showings, suggesting “the U.S. residential real estate market is adjusting and stabilizing.” CoreLogic reports that between Q1 2020 and Q1 2021, the average homeowner with a mortgage gained $33,400 in equity, a 19.6% annual increase, the highest in more than a decade. The combined equity gain was more than $1.9 trillion. The Fed Funds Futures market still sees no rate hikes for the rest of the year. Ahead of the June 16th meeting, there were still a few projecting there would be a rate change, but following the meeting the Feds Funds Futures market has the percentage change of change at 0% for the rest of the year. Investors may fear rates will rise in 2023, but Fed Chair Powell made it clear the central bankers will leave rates where they are until then. The Wall Street crowd believes him thus far. Even as consumer prices escalate monthly, Wall Street is buying the Fed’s view this inflation is “transitory.” That means no need for a rate hike to rein it in.
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