Austin Real Estate Update | March 2021
I truly hope this finds you healthy and in good spirits. Spring is right around the corner! 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!
Impact from winter storms likely to increase housing demand
Austin-Round Rock MSA home sales jumped 23.9% to 2,523 sales in January, according to the latest Central Texas Housing Market Report by the Austin Board of REALTORS®.
Across the five-county MSA, home sales dollar volume skyrocketed 53.5% to $1,161,692,362 while pending sales increased 15.9% to 3,365 in January. Despite 2,878 new listings in January—an 11% decline from 2020—active listings dropped 73.9% to only 1,369 properties across the region. Housing inventory fell 1.3 months to a record-low 0.4 months of inventory as homes spent an average of 33 days on market, 33 fewer days than in 2020.
Vaike O’Grady, regional director with Zonda, said that high demand across all price classes, housing types and geographies means that low inventory and a lightning-fast market conditions are not going away soon:
“There is strength across every price point and demand for every product, despite developers building as quickly as they can throughout the region and more than 6,000 homesites projected to come online within the next six months, the overall number of lots in development is only just able to keep up with current demand. This means that homes will continue to sell as soon as they hit the market, and prices will continue to rise steadily in the months to come.”
The recent winter storms are only likely to increase housing demand in Central Texas. While it will be weeks before we know the full impact of the winter storms on our communities, the disruption in transactions and the high demand for repair services will further complicate an already complex housing market. In January, residential sales increased 23.8% to 811 sales, a record for the month of January, as sales dollar volume jumped 58% to $466,444,738. The median sales price in the city of Austin rose 19.7% to $455,000, a record for the month of January. During the same period, new listings decreased by 7% to 956 listings, while active listings fell 46.9% to 589 listings, and pending sales jumped 14.8% to 1,066 pending sales. Monthly housing inventory decreased 0.6 months year over year to 0.5 months of inventory. In Travis County, residential sales increased 23.5% to 1,292 sales, while sales dollar volume spiked 60% to $718,269,389. The median price for residential homes rose 22.2% year over year to $427,750. Last month, new listings declined 12.7% to 1,411 listings as active listings dropped 63.5% to 819 listings, and pending sales jumped 10.1% to 1,576 pending sales. Monthly housing inventory fell 0.9 months year over year to 0.5 months of inventory. (information courtesy of ACTRIS)
National Market Update Nationally, January Existing Home Sales edged up to a 6.690 million annual rate, every major region posting 20%+ gains the past year. New Home Sales rose 4.3% in January to a 923,000 annual rate. This second consecutive month of gains took sales 19.3% ahead of last year, while inventories grew by 8,000 units. 71% of homes were off the market in less than a month, dropping inventories 25.7% below last year. Building Permits rose 10.4% in January, to a 1.881 million annual rate, up 22.5% from a year ago, to the highest level since 2006. NAHB builder sentiment moved up in February, approaching its record high. The Pending Home Sales index of contracts on existing homes slid 2.8% below December. But it’s up 13% over last year, all four geographic regions showing annual increases. The monthly decline was from “simply not enough homes to match the demand,” according to the National Association of Realtors chief economist, but he forecasts “a natural seasonal upswing in inventory in spring and summer.” Realtor.com says to expect a hot spring, with buyer demand and sales up, price growth stable but high, though new listings lag. Their Housing Market Recovery Index moved north last week, staying above its pre-pandemic baseline. The Fed Funds Futures market expects no change in rates at the central bank's meet Wednesday, and for that situation to remain, well into the future. This does not mean, however, that mortgage interest rates will not increase. In the past two weeks I've seen rates rise by half a point (+0.5).
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