Austin Real Estate Update | December 2020
I truly hope this finds you healthy and in good spirits. It's Thanksgiving season and always a great time to reflect on what we each have to be thankful for. 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!
The Austin-Round Rock Metropolitan Statistical Area (MSA) posted another strong month of sales growth, according to the October 2020 Central Texas Housing Market Report released by the Austin Board of REALTORS. The MSA experienced a 29.4% increase to 3,780 in October home sales year over year, while homes continued to sell faster and at higher price points than ever before.
In addition to a third-consecutive month of double-digit home sales growth, median sales price increased 13.2% to $365,000, an all-time record, and sales dollar volume skyrocketed 55.3% to $1,778,706,460. Pending sales jumped 28.8% to 3,829; new listings increased 10.2% to 3,747; while active listings fell 50.3% to 3,501 sales. Homes spent an average of 35 days on market, 19 fewer days than in October 2019, and inventory fell 1.2 months to 1.1 months across the five-county area.
The Greater Austin Chamber of Commerce expressed a positive outlook for the local economy and job market for 2021 but echoed concerns around housing affordability and accessibility. “Austin’s rank as one of the best places to live, work, and thrive in the country is evident by not only the growth of our housing market, but also by the growth of our local economy,” Laura Huffman, president and CEO of the Austin Chamber of Commerce, said. “Our region has a lower year-over-year job loss than any other major metro, and despite the pandemic, a record number of businesses have chosen to relocate to or expand in the region this year. We expect this growth—attributed to Texas’ business-friendly environment paired with Austin’s deep talent pool—will continue through 2021. Despite this, in 2021 the region needs to address housing affordability to help people from being priced out of the market, even as salary and job growth continues.” The median sales price in the city of Austin set an all-time record, rising 13.1% to $441,250 in October. Residential sales increased 22.7% to 1,224 sales, as sales dollar volume soared 52.6% to $705,053,179. During the same period, new listings increased 19.7% to 1,345 listings while active listings decreased 23.6% to 1,349 listings, and pending sales jumped 29.8% to 1,221 pending sales. Monthly housing inventory decreased 0.4 months year over year to 1.3 months of inventory. In Travis County, residential sales increased 22.4% to 1,921 sales, while sales dollar volume jumped 54.2% to $1,105,700,927. The median price for residential homes climbed 16.2% year over year to $430,000. During the same period, new listings increased 14.9% to 2,008 listings, active listings decreased 41.8% to 1,932 listings, and pending sales rose 29.9% to 1,931 pending sales. Monthly housing inventory fell0 .9 months year over year to 1.2 months of inventory. (information courtesy of ACTRIS)
National Market Update Home purchases are still going full force, according to the latest data from the Mortgage Bankers Association. This past week the MBA reported a 9% jump in mortgage purchase activity with a whopping 28% annual increase. Refinances continue to dominate the landscape with an annual increase of 102%. The average purchase loan amount hit $375,000. That is the highest on record since the MBA’s inception in 1990. Off a tick monthly thanks to September's upward revision, October New Home Sales soared 41.5% over a year ago, 29.1% above their pre-pandemic high. Builders are well-motivated when supply is below 4.3 months and it’s now at 3.3. Pending Home Sales dipped a tad in October, but are up a whopping 20.2% the past year. This index of contracts signed on existing homes was ahead annually in all regions, and forecasts solid November and December closed sales. Sam Khater, Freddie Mac’s chief economist, does express some concerns as he recently stated, “Despite persistently low mortgage rates, home sales have hit a wall. While homebuyer appetite remains robust, the scarce inventory has effectively put a limit on how much higher sales can increase. Unfortunately, the record-low supply combined with strong demand means home prices are rapidly escalating and eroding the benefits of the low mortgage rate environment.” Both conforming loan limits and FHA loan limits in the Austin area have been revised upward for 2021: Conforming: 1 unit - $548,250, 2 unit - $702,000, 3 unit - $848,500, 4 unit - $1,054,500 FHA: 1 unit - $416,300, 2 unit - $532,950, 3 unit - $644,200, 4 unit - $800,600 One other thing I want to touch on as many of my clients looking at new construction have wondered about the builders pushing the prices up at a fairly rapid clip this year. Much of the initial jump in (largest) pricing, generally 15-30k worth, was due to the lumber shortage. Builders actually had to import lumber rather than using US, as the inventory was very low. If you look at the chart below, you'll note the rapid rise in lumber pricing. Good news is it's beginning to normalize, although still up 50% from the beginning of the year.
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