Austin Real Estate Update | July 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!
The Greater Austin area continued to feel the stark effects of COVID-19, as housing
inventory dropped to critically low levels of less than 2 months of inventory in Austin, Travis County and Williamson County, according to the Austin Board of REALTORS® (ABoR) latest Central Texas Housing Market Report.
Compared to May 2019, residential sales in the five-county Metropolitan Statistical Area (MSA) decreased 29.2% to 2,697 sales, while sales dollar volume dropped 30.8% to $1,092,374,935. At the same time, the median sales price increased 0.7% to $329,893 and homes spent three fewer days on the market—an average of 47 days.
Personal take - Home sales dropped in the May numbers simply as an offshoot of not having enough inventory in the market. With the shelter-in-place order still in effect in April, it was understandable that many sellers pulled their home off the market or held off on listing. With the (comparatively) limited inventory, even at the beginning June, I saw many properties go under contract and close that had even been sitting for months prior. We are taking precautions as we show homes, including providing masks and sanitizer if needed.
Mark Sprague, state director of information capital at Independence Title, said that although real estate was deemed essential, it was significantly impacted by the slowing economy. "If you compare Austin's home sales to the majority of large cities in the U.S., you'll find Austin's market has remained strong," Sprague said. "But, because sales numbers have a one-to-three-month lag time, it was no surprise May sales declined and we'll likely see the same in June and July. The solution is increased housing stock. Until more homes are put on the market, we won't see home sales recover anytime soon." In the Austin-Round Rock MSA, an 18.8% decline to 6,086 active listings pushed housing inventory down further to 2 months, 0.6 months lower than May 2019. During the same period, new listings declined 15.8% to 4,151 listings, while pending sales jumped 14.2% to 4,287 sales. In the city of Austin, continued demand and limited inventory drove home prices up, as sales dropped due to fewer listings. The median price for residential homes increased 10.7% year over year to $424,050. Residential sales decreased 36.6% to 826 sales, and sales dollar volume decreased 32.5% to $418,410,453. During the same period, new listings fell 18.7% to 1,348 listings, active listings decreased 13.5% to 1,684 listings and pending sales declined 4.9% to 1,216 pending sales. Monthly housing inventory decreased 0.2 months year over year to 1.7 months of inventory. At the county level, residential sales declined 33.8% to 1,319 sales, and sales dollar volume dropped 35% to $644,917,945. The median price for residential homes increased 4.7% year over year to $398,345. During the same period, new listings decreased 17.1% to 2,162 listings, while active listings declined 19.7% to 2,959 listings. Pending sales slightly increased 1.1% to 2,016 pending sales. Monthly housing inventory decreased 0.5 months year over year to 1.9 months of inventory. (information courtesy of ACTRIS)
Send a Referral National Market Update After their upside surprise in April, New Home Sales blasted ahead 16.6% in May, to a 676,000 annual rate. Sales are up 12.7% from a year ago, the 12-month average just 1.1% below February’s post-2008 high. Existing Home Sales dropped 9.7% in May, to 3.910 million annually. But those contracts were signed at the height of the lockdowns, while New Home Sales, logged at contract signing, are a timelier indicator of current activity. Freddie Mac: “After the Great Recession, it took more than ten years for purchase demand to rebound to pre-recession levels, but in this crisis, it took less than ten weeks,” helped by “the low mortgage rate environment.” The Pending Home Sales index of contracts signed on existing homes, a good read on buyer activity, is forecast to bounce back substantially in May. Also bouncing should be Nonfarm Payrolls, expected to report several million more jobs, giving a nice boost to Consumer Confidence. The Fed funds futures market currently sees no rate hikes for quite a while.
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