Austin Real Estate Update | September 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!
According to the latest Central Texas Housing Market Report released by the Austin Board of REALTORS® (ABoR), the Austin-Round Rock Metropolitan Statistical Area (MSA) continues to exhibit resiliency in the face of COVID-19. The MSA posted its second consecutive month of strong home sales numbers with a 21.5% increase in July sales year over year. The robust increase demonstrates the vital role real estate will play as the region begins its economic recovery from the COVID-19 pandemic.
In addition to the 21.5% jump to 4,537 home sales across the five-county MSA, the median price increased 10.7% to $353,000 and sales dollar volume also soared 36.7% to $2,037,152,035. Pending sales climbed 32.2% to 4,607 as new listings increased 13% to 4,767, while active listings dropped 32.4% to 5,309 due to demand.
Personal take - Strong home sales, as well as an increase in new listings and pending sales are good indicators of the health of a market. The general thought is that there is growing confidence that the consecutive positive numbers indicate the real estate market is back on track. What will be worthwhile to note when August statistics are delivered is how much the low inventory levels impacts sales. I'm still seeing an abundance of multiple offer situations, a strong indicator that there are more buyers and than the inventory will accommodate. Much of the inventory that is currently sitting is being hamstrung by some fundamental deficiency such as floorplan functionality, condition, and price. This is why there is a rush of showings/offers whenever anything new comes to market if the property is priced well and suffers from no noticeable quirks.
Homes across the MSA spent an average of 44 days on the market, three fewer days than July 2019, and housing inventory fell by a full month to 1.7 months of inventory. This extremely low level of inventory, when paired with continued demand across the region, has led to rising home prices, creating a very strong seller’s market. As inventory falls, I find myself continuing to work aggressively to research the market and find the properties needed to meet my client’s demands. Strategic offers are important in this competitive market. Recent economic development successes in the region—notably from Tesla and BAE Systems—will bring thousands of jobs to the region and contribute to our ongoing population growth. Our region has a long way to go in its recovery from the brunt of this pandemic, but economic indicators show the Central Texas economy will weather this storm. In the city of Austin, there was a 21.4% increase to 1,470 home sales which resulted in $793,610,174 in sales dollar volume, a 41.8% increase. The median price for residential homes increased 11.3% year over year to $423,000. During the same period, new listings jumped 20.4% to 1,676 listings, active listings decreased by 19.1% to 1,653 listings and pending sales rose 25% to 1,413 pending sales. Monthly housing inventory decreased 0.3 months year over year to 1.7 months of inventory. Travis County saw residential sales increase by 17% to 2,258 sales, and sales dollar volume climbed 34.2% to $1,233,588,708. The median price for residential homes increased 10.3% year over year to $411,412. During the same period, new listings also increased 13.7% to 2,503 listings, while active listings declined 29.6% to 2,697 listings. Pending sales grew by 27.3% to 2,277 pending sales. Monthly housing inventory decreased 0.8 months year over year to 1.7 months of inventory. (information courtesy of ACTRIS)
National Market Update How’s this for V-shaped: existing-home sales hit their bottom in May, down 32.1%; then, after record-setting gains in both June and July, existing-home sales have now soared above their February high, to a 5.860 million annual rate. Growth occurred in all major regions for both single-families and condos/coops. Yes, inventories are down versus a year ago, so prices rose, but demand took 68% of homes sold in July off the market in less than a month. For the third month in a row, Pending Home Sales (signed contracts on existing homes) rose in July and are now up 15% annually. The National Association of Realtors reports “nine new contracts for every 10 new listings.” Helping inventory, Housing Starts exploded 22.6% in July to a 1.496 million annual rate, 4.5% below February, so just short of a full V-shaped recovery. New Home Sales also posted their third consecutive month of gains in July, hitting their fastest sales pace in 13 years, and putting them 16.4% above the high they reached in January before the shutdown. NAHB homebuilder sentiment tied its highest read on record since 1998. Purchase mortgage applications are up annually 33%, refinances up 34%. But from December 1, there'll be a 0.5% fee on Fannie and Freddie refis, except for affordable Home Ready and Home Possible loans and ones below $125,000. The national average 30-year fixed mortgage rate fell 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 forecasting of the Federal Reserve for the remainder of the year shows a 0% probability of any change in rate and 100% certainty the rate will stay the same. I did see a number come across yesterday that I had never seen before - 2.125% on a 15yr new loan.
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