I truly hope this finds you healthy and in good spirits. My prayers are with those of you who have been personally impacted by Covid-19. It has put many of our lives on pause and altered our daily routines and patterns. I only ended 14 days in self-quarantine this past Saturday after I was exposed to someone who tested positive. The Austin market is still very active despite the shelter in place rules. With the federal government clarifying that real estate qualifies as essential business on Monday, it will be interesting to see how local municipalities proceed. Interest rates are low, competition has decreased, and real estate is seen as a solid investment, which shows in our local market. During the past two weeks, 361 homes sold in Austin (405 went pending.) In the last week, 340 new homes have been listed. 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 Board of REALTORS® (ABoR) February 2020 market analysis showed a 6.8% increase in residential home sales in the Austin-Round Rock Metropolitan Statistical Area (MSA) and a 12.8% increase in median sales price to $327,140. While sales increased from 2,363 homes in February 2019 to 2,524 homes last month, new listings decreased 11.8% year-over-year, and inventory dropped to 1.5 months of inventory, painting the picture of Austin's historically competitive housing market and high demand.
With the impact of COVID-19 beginning to take hold, it's uncertain how social distancing will affect the way the market continues to operate. There are a number of tools and best practices that ensure REALTORS® can continue to serve Central Texas home buyers and sellers safely as we all make changes to accommodate the Center for Disease Control’s guidelines, including expanded visual libraries, interactive floor plans and virtual tours.
Mark Sprague, state director of information capital for Independence Title, said Austin’s economy and housing market could be well positioned to minimize the potentially negative impact of COVID-19, “Austin’s economy has diversified and strengthened over the past two decades. This leads me to be optimistic that our region is in a strong position to withstand economic downturns that may have a greater impact nationally. Effects will still be felt, especially by those who depend on each paycheck to pay their bills and provide for their families, and that cannot be discounted.” According to Sprague, despite the current uncertainty, buyers are still eager to close sales in Austin. “Current indicators are that Austin’s housing market remains strong and competitive. Any decrease in inventory would only increase competitiveness in our market. Overall, Austin’s economy and housing market look to be resilient during this uncertain time. Once COVID-19 subsides, there is a potential for even more investment by employers in the Austin market, and I would expect those looking for a more affordable cost of living compared to other major U.S. metropolitan areas will still look to move to and buy homes in Austin.” In the Austin-Round Rock MSA, the median sales price for February 2020 was $327,140, an increase of 12.8% from February 2019. February residential home sales dollar volume increased 21% to $1,027,245,686. During the same period, new listings decreased 11.8% to 2,925 listings, and active listings decreased 29.4% to 4,534 listings. However, pending sales jumped 10.9% to 3,137 pending sales. Monthly housing inventory declined 0.7 months year over year to 1.5 months of inventory. Across the five-county MSA there were 2,524 closed sales. High demand across the city and limited inventory pushed the median price for residential homes to $395,000, a 14% increase from February 2019. Residential home sales increased 3.3% to 857 sales and total sales dollar volume increased by 18.1% year over year to $417,071,623 last month. During the same period, new listings decreased 5.6% to 1,032 listings; active listings dropped 34% to 1,072 listings; however, pending sales rose 4.5% to 999 pending sales. Monthly housing inventory decreased 0.6 months year over year to 1.0 month of inventory. (information courtesy of ACTRIS)
National Market Update Another report portrayed a solid housing market as we work with the Coronavirus slowdown. New Home Sales, off 4.4% in February, were up a strong 14.3% versus a year ago, at a 765,000 annual rate. To help keep the home buying process moving, Fannie Mae and Freddie Mac are easing standards for property appraisals and verification of employment on some loans. Please contact us for the specifics. As low mortgage rates keep motivating buyers, they're addressing health concerns by viewing virtual tours before visiting listings, seeing inspections on tablets, and hiring services to sanitize their new purchase before moving in. In mid-March the Fed slashed their rate to near zero. At the beginning of March, projections were that they would probably adjust the rate in May but, well, times change and large measures were undertaken to stabilize the economy for what could be a short recession. Fed Chair Jerome Powell said that combating coronavirus is causing a GDP contraction, but it likely would be short and the rebound sharp given that the weakness is not coming from the economy or banking system. Mortgage rates stabilized this past week after the Fed announced there would be no limit to its bond buying program to shore up the economy. That includes purchasing mortgage-backed securities, which should keep bond prices up and rates down. The national average 30-year fixed mortgage rate dropped for the first time in three weeks 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. It's a great time to refinance if your current mortgage rate is above 4%, given that I've seen the rate drop to as low as 3% on a 30 year.
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