Austin Real Estate Update | June 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!
Austin-area home sales declined across most of the region in April as the full impact of the COVID-19 pandemic and local shelter-in-place orders was felt in the housing market, according to the Austin Board of REALTORS® (ABoR) latest Central Texas Housing Market Report.Compared to April 2019, residential sales in the five-county Metropolitan Statistical Area (MSA) decreased 21.6% to 2,611 sales, while sales dollar volume fell 18.3% to $1,060,228,668. A 7.3% decline in active listings to 6,349 listings drove housing inventory down further to 2.1 months, 0.2 months lower than this time last year. At the same time, median sales price increased 3.2% to $325,000 and homes spent nine fewer days on the market, or an average of 43 days.
Personal take - As I mentioned in last month's update, April's numbers being down was expected. While there was a sharp decline in the numbers due to the shelter in place orders and other COVID-19 related restrictions, it is still interesting to note that home sales prices still rose while time on market decreased when compared to April 19. With listing inventory declining during the period, as sellers took their homes temporarily off the market or held off listing, the demand actually strengthened and I believe that's what you're seeing reflected in the sales price/time on market stats. With Texas already opening back up in May (in stages), the market has jumped back up and I would anticipate May's pending numbers to be better, but not fully "back" yet, and the sales to be lower, given that they are lagging indicators by 30-60 days. Given that, as of May 27th, May 2020 has only 3.6% under May 2019 in pending sales, it would appear the buyers are back in the market.
Continued declines in listing activity in April 2020 could mean a second consecutive month of declining home sales. During the same period, active listings dropped 7.3% to 6,349 listings, new listings declined 21.1% to 3,516 listings, and pending sales declined 25% to 2,801 sales. Lawrence Yun, chief economist and senior vice president of research at the National Association of REALTORS®, said while Central Texas has not been more negatively impacted than the U.S. housing market at large, he anticipates improvement in the market. “As the economy steadily reopens, expect more listings to pop up, which will help ease the housing shortage. By the end of this year, home sales could be at levels comparable to 2019,” Yun said. “The local economy will also get an additional boost from more home construction that is needed for improving the market going into the next year,” Yun concluded. In the city of Austin, the median price for residential homes experienced a double-digit increase of 12.3% year over year to $421,000. Residential sales decreased 33.1% to 759 sales, and sales dollar volume dropped by 23.9% to $387,921,787. During the same period, new listings decreased 24.8% to 1,158 listings, active listings fell 6.2% to 1,631 listings and pending sales declined 39% to 814 pending sales. Monthly housing inventory decreased 0.1 months year over year to 1.6 months of inventory. At the county level, residential sales declined 28.6% to 1,223 sales, and sales dollar volume dropped 23.7% to $602,124,601. The median price for residential homes increased 9.7% year over year to $395,000. During the same period, new listings decreased 26.5% to 1,779 listings, while active listings declined 12.8% to 2,929 listings. Pending sales also dropped 34.4% to 1,331 pending sales. Monthly housing inventory decreased 0.3 months year over year to 1.9 months of inventory. (information courtesy of ACTRIS)
National Market Update In April, pending home sales on existing homes fell 21.8% but the Yun expects this to be the lowest point for contracts while May will be the lowest for closed sales. The quick turnaround is beginning to be reflected in the preliminary weekly stats for May, as nationwide the week ending the 10th is up 50% from the same period in April. Additionally in that same period, new listings were up 12.5% monthly and home values up 4.3% year-over-year. New home sales were up 0.6% to 623,000 annually, although housing starts took a dip due to the shelter in place orders. Buyers are jumping on the lower mortgage rates (lowest on record) although Fed watchers feel that in order to spur a rate hike the Fed will need to see strong economic data and that could be a while. Freddie Mac noted that the low mortgage rates are "giving potential buyers a good reason to continue shopping" and that they are "seeing purchase demand improve remarkably fast, now essentially flat relative to a year ago"
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