A typical Austin February usually means colder temperatures and rain bringing welcome relief after a long hot summer. The housing market, however, did just the opposite this February and steamed along at another record breaking pace. “Last month, economists predicted an upwards of 5 percent growth in median home prices within the Austin area, and we have far surpassed that,” Steve Crorey, 2018 president of the Austin Board of REALTORS®, said. “This is especially evident in local markets where housing demand is strongest, such as Austin and Cedar Park. Home price increases are sharpest in these markets, while dwindling housing inventory in the lower price classes could be discouraging people from buying.”
Where is this growth coming from? Continued low unemployment and the high skills set of the Austin workforce continue to attract a steady stream of technology companies that bring high-paying jobs to the area. According to Eldon Rude, principal of Austin consulting firm 360º Real Estate Analytics, in a speech delivered Home Builders Association of Greater Austin, “Central Texas has been adding jobs at an average annual rate of 3.3 percent, or 27,300 jobs per year, over the past 10 years.” Rude cited examples of several large leases in which technology companies will occupy the majority — and in some cases, the entirety — of new area office buildings. Those include Google, Facebook, Indeed, HomeAway and Parsley Energy. That means that this year’s housing market in Central Texas could continue last year’s trend with of low inventory levels, rising prices and strong demand. Areas with highest market demand and lowest inventory experienced double-digit percent price increases and declines in sales activity.
Here’s how housing performed in Central Texas in February 2018:
- Across the Austin-Round Rock metropolitan area, median home prices rose 4% to $299,900, accompanied by a 6% increase in sales with 1,955 homes sold. Inventory remained flat at 2 months, well below the 6 months required for there to be balance, or parity between buyers and sellers.
- The City of Austin is one of the areas cited for high demand and low inventory. Median home prices in Austin rose 12% to $367,701, but sales dropped 7% to only 599 homes sold with inventory dropping to 1.3 months.
- Travis County, home to a large portion of the City of Austin, showed an 8% rise in median home prices to $345,000. Overall sales were 962 homes sold, a 1% increase. Inventory remained stable but low at 1.9 month.
- Williamson County, showed some diversity in its results. Overall median home prices had a modest increase of 1% to $275,000, but the number of sales increased a whopping 13% to 689 versus February 2017. Inventory levels remained stable at 2 months. However, parsing out some of the regions within Williamson County shows the real movement in the housing market. In Cedar Park, February sales decreased 6.8 percent to 69 sales, while the median price of single-family homes increased 12.5 percent to $329,000. In Leander, where there’s a greater supply of new homes, February sales increased 13.9 percent to 82 sales, and the median price of single-family homes decreased 6.6 percent to $269,900. Round Rock experienced a subtle increase in sales–2.8 percent from last February to 109 sales; median home prices increased 6 percent to $263,840.
- Hays County also showed a significant increase in home sales. February sales increased 12.1 percent to 222 sales compared to the previous year, and the median home price increased 6.7 percent to $255,000. Across the county, housing inventory decreased to 2.2 months of inventory, compared to 2.5 months of inventory the previous year. Sales in Buda decreased 3.5 percent year-over-year to 28 sales, and the median home price remained unchanged at $279,900. Kyle experienced a significant increase in sales—a 21.2 percent increase to 63 sales—compared to the previous February. The median price increased slightly 2.8 percent to $213,000.