Austin Real Estate Update | November 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!
According to the latest Central Texas Housing Market Report released by the Austin Board of REALTORS® (ABoR), the Central Texas housing market continues to exhibit strength despite economic challenges and shrinking housing inventory. In September, home sales across the Austin-Round Rock MSA soared 31.5% year over year to 3,892 sales. Historically this time of year home sales are slower, but because of decreased activity during the shelter-in-place orders due to the COVID-19 pandemic, the summer selling season extended into September.
The market’s strength was evident across the five-county MSA as sales dollar volume jumped 51.7% to $1,779,067,529, and the median price rose 12.1% to $355,000. New listings increased 5.0% to 3,539 listings, and pending sales jumped 28.2% to 3,767. At the same time, active listings dropped 49.9% to 3,708 listings.
Personal take - One interesting item to note in the shifting dynamic of the Austin market is that the suburban markets of Austin have typically offered more inventory and significantly lower price points for buyer, helping to provide more options and opportunity for those buyers for whom Austin proper wasn't an option. These markets are now showing similar increases in pricing and restriction of inventory, which then puts even more pressure on a tight market. Almost all the contracts I've worked the past 2 months have been multiple offer situations.
Homes across the MSA spent an average of 37 days on the market, 14 fewer days than September 2019, and housing inventory decreased 1.3 months to 1.2 months of inventory. Vaike O’Grady, Austin regional director for Zonda (formerly Metrostudy), said the city of Austin has a limited number of residential lots. This is forcing developers to move to the suburbs where land is more available and less expensive. When it comes to construction in suburban markets, homes simply can’t be put on the ground fast enough to meet demand. “We need to remove the barriers to new construction and open up more building opportunities across the region to create more inventory for buyers,” O’Grady said. “Austin’s economy is bouncing back better than most cities, allowing more people to make a move to a home that meets their needs. To solve Austin’s housing supply and affordability challenges, we need to commit to streamlined review and approval processes for new construction.” In the city of Austin, low levels of inventory drove the median home price up 8.7% year over year to $415,500. Residential sales increased 20.7% to 1,248 sales, as sales dollar volume spiked 39.2% to $678,062,256. During the same period, new listings increased 16.4% to 1,273 listings, active listings decreased 24% to 1,390 listings, and pending sales increased 16.6% to 1,164 pending sales. Monthly housing inventory decreased 0.4 months year over year to 1.4 months of inventory. At the county level, residential sales increased 27.1% to 1,930 sales, while sales dollar volume jumped 50% to $1,081,018,324. The median price for residential homes increased 13.8% year over year to $420,000. During the same period, new listings increased 8.4% to 1,863 listings, while active listings declined 41.8% to 2,039 listings. At the same time, pending sales rose 18.4% to 1,836 pending sales. Monthly housing inventory fell .9 months year over year to 1.3 months of inventory. (information courtesy of ACTRIS)
National Market Update Nationally, more listings look to be on the way, as Freddie Mac’s latest survey reports 56% of respondents say now is a good time to sell, thanks to rising home prices. 54% still feel it’s a good time to buy, so demand should continue. The National Association of Realtors Housing Market Recovery Index rose well above its pre-pandemic baseline, more sellers are listing, and asking price growth dipped, its first drop since mid-April. Existing Home Sales shot up 9.4% in September with gains in all major regions for both single-family homes and condos/coops. The 6.54 million annual rate puts them 13.5% above their pre-pandemic level, forming a V-shaped recovery. Single-family Housing Starts bounded ahead in September for the fifth month in a row, and are now 7.2% above their pre-pandemic high, also indicating a full V-shaped recovery. Permits for future work are up five months straight. The national average 30-year fixed mortgage rate hit a new record low in Freddie Mac's Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information. The economy is coming back better than expected, but the Fed won't raise interest rates until the unemployment rate drops a lot further. In fact, a 0% probability of change is predicted for the Fed meetings in November, December, and January.
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