The Austin housing market continues to bust at the seams and all signs are pointing to a very active summer ahead. “Last month, 2,714 single-family homes were sold in the five-county Central Texas region, which is more sales than any March we’ve seen on record,” Steve Crorey, 2018 president of the Austin Board of REALTORS®, said. Median home prices rose 3.5% to $305,233 across the Austin-Round Rock MSA and inventory dropped to a low of 2.2 months, well below the 6.0-6.5 months of inventory the Real Estate Center at Texas A&M University projects for a balanced housing market. In addition, March saw fewer houses come on the market by 2.8% and an overall decrease of 2.4% in active listings. The continued shortage of homes for sale and the lack of new homes coming on the market are restricting supply. At the same time, the desirability of the Austin economy continues to attract people and businesses, putting pressure on demand. Home prices inevitably rise under these conditions.
The pressures are most intense at the lower end of the market. “Demand for homes priced below $250,000 is driving the emergence of new submarkets like Manor and Del Valle, where builders can construct homes at a lower cost,” Vaike O’Grady, Austin regional director for Metrostudy, said. “We’re also seeing creative land plans that provide common area open space to offset smaller lot and home sizes. Attached single-family homes are also coming to the market to meet buyer demand for more affordable housing.”
Another effect of this pressure on the increase demand and upward pricing is to move potential homeowners to rent instead of buy. According to a recent Marcus & Millichap Real Estate Investment Services report cited in the RECON report published by the Texas Real Estate Center at Texas A&M University, “the homeownership rate in the metro has fallen for three consecutive years amid a tight single-family housing market. This pushed many new residents and would-be homeowners into rental housing. “
Below are summary results for the various segments of the Austin-Round Rock market.
AUSTIN-ROCK ROCK METRO AREA Single-family home sales volume steadily increased within the city of Austin in March 2018. Of single-family homes sold, 13.7 percent sold for less than $250,000; 60.5 percent sold between $250,000-$500,000; and 25.8 percent sold for $500,000 or more.
Median home prices increased 3.5% to $305,233 year-over-year and sales were up 10%, with homes between $300-$399 having largest volume increase. While sales went up, new listings fell 2.8%; active listings decreased 2.4% and inventory fell to 2.2 months. And homes stayed on the market 61 days, 3 days more than this time last year. The Real Estate Center at Texas A&M University requires 6.0-6.5 months of inventory for a balanced housing market.
CITY OF AUSTIN Single-family home sales volume increased 8.5% in March. Of single-family homes sold, 13.7% sold for less than $250,000; 60.5% sold between $250,000-$500,000; and 25.8% sold for $500,000 or more. The median price for single-family homes in the city of Austin barely increased 0.1% to $370,000. The number of new listings fell 10.5%, and active listings fell 11.6%. The result was that overall housing inventory dropped slightly from 1.7 months to 1.5 months, with homes staying on the market an average of 46 days, 5 days less than same time last year. The Real Estate Center at Texas A&M University requires 6.0-6.5 months of inventory for a balanced housing market.
TRAVIS COUNTY Single-family home sales volume increased by 12.8% in Travis County. Of single-family homes sold, 21% sold for less than $250,000; 52.7% sold between $250,000-$500,000; and 26.2% sold for $500,000 or more. Manor showed the highest spike at 173%. The median price for single-family homes in Travis County grew 1.4% year-over-year to $355,000. Outside the city limits, the median price increased 6.5% to $195,900 in Manor; 14.9% to $331,000 in Lago Vista; and 3% to $475,497 in Lakeway.
Travis County inventory levels dropped to 2.1 months with homes staying on the market an average of 57 days. In the suburbs, housing inventory levels were 1.8 months in Pflugerville; 1.8 months in Manor; 3.4 months in Lakeway; and 3.8 months in Lago Vista. The Real Estate Center at Texas A&M University requires 6.0-6.5 months of inventory for a balanced housing market.
WILLIAMSON COUNTY Single-family home sales increased of 9.1%. Of single-family homes sold, 35.2% sold for less than $250,000; 58.8% sold between $250,000-$500,000; and 6% sold for $500,000 or more. A review of the major cities in Williamson County showed Leander sales up 33%, Round Rock sales up 2.5% and Georgetown sales up 37.5%. Cedar Park sales fell by 28.8%, the only municipality to decline. Median home prices in Williamson County were up 4.6% to $277,383 overall. Within the county, Georgetown increased slightly 0.9% to $261,000; Round Rock median home prices rose 7% to $259,000; Leander home prices rose 22.2% to $297,500; and Cedar Park home prices increased 8.1% to $319,000. Inventory levels were down from 2.3 months to 2.2 months as a result of both increases and decreases in the underlying municipalities: 1.5 months inventory in Round Rock; Georgetown 2.4 months; 1.5 months in Cedar Park; and 2.4 months in Leander. The Real Estate Center at Texas A&M University requires 6.0-6.5 months of inventory for a balanced housing market. New listings in Williamson County decreased in March by 2.8% while active listings increased slightly 0.7%, with homes in the county staying on the market an average of 64 days vs. 54 days this time last year.
HAYS County single-family home sales increased 2.8% year-over-year in March. Locally, single-family home sales decreased from the previous March— 32.7% in San Marcos and 35.1% in Buda; however, sales increased 19.7% in Kyle.
Median home prices rose 2% to $260,000, with San Marcos reporting $203,750, $225,000 Kyle and $280,000 in Buda County wide, the inventory was flat at 2.6 months; 1.7 months in Kyle, 1.6 months in Buda and 2.6 months in San Marcos. The Real Estate Center at Texas A&M University requires 6.0-6.5 months of inventory for a balanced housing market. Homes in Hayes County spent an average of 72 days on the market, the highest of all counties in the area. New listings were up 13% and overall active listings were up 4.9%.