Austin Real Estate Update | April 2021
I truly hope this finds you healthy and in good spirits. Spring is here and the market is still tight and challenging to navigate, with homes still going with multiple offers and 20-30% over list. There are strategies that can be employed to increase the chance of success on a winning offer, and strategies that can be used to maximize the sale price as a seller. These are unprecedented times in Austin, and I 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!
Housing market operating on record-low inventory
Following the devastating Texas winter storms that thwarted housing market activity for nearly two weeks, Austin-Round Rock MSA home sales dipped for the first time since June 2020. According to the latest Central Texas Housing Market Report released by the Austin Board of REALTORS® (ABoR), Austin-area home sales declined 8% to 2,389 sales in February. During the same time, market demand drove housing inventory down 1.2 months to a record-low 0.4 months of inventory and the median home price up 22.5% to an all-time high of $395,000.
Across the five-county MSA, home sales dollar volume jumped 15.9% to $1,207,218,785, while pending sales fell 15.5% to 2,573 in February. At the same time, new listings decreased 24.8% to 2,565, and active listings dropped 74.1% to 1,310 listings. Homes spent an average of 31 days on market, 32 fewer days than in February 2020.
In reviewing preliminary stats for March, it looks like appreciation from +29.85% (Median Sold) to +35.79% (Avg Sold) with a median of only 4 days on market. Austin proper experienced an increase 37.46% on Avg Sold and 36.23% on Median Sold.
Lawrence Yun, chief economist and senior vice president of research at the National Association of REALTORS®, said while the Austin market has been acutely affected by the lack of inventory, there’s also a nationwide inventory shortage. “Until we have more supply, the lack of inventory and prices rising nationwide are going to present challenges for homebuyers everywhere,” Yun said. “Although it's not visible, mortgage rates will continue to rise throughout the year. Get all your documents and finances prepared early, and realize you may not buy your dream home, but it will be a worthwhile investment,” Yun concluded. The median sales price in the city of Austin spiked 24.3% to $491,000 in February, an all-time high for any month on record for the city of Austin. Residential sales decreased 4.6% to 834 sales, as sales dollar volume increased 17.3% to $494,005,207. During the same period, new listings decreased 26.5% to 806 listings, while active listings dropped 53.7% to 516 listings, and pending sales decreased 9.3% to 840 pending sales. Monthly housing inventory decreased 0.6 months year over year to 0.5 months of inventory. In Travis County, residential sales decreased 2.3% to 1,287 sales, while sales dollar volume rose 26.7% to $777,811,342. The median price for residential homes increased 25.3% year over year to $470,000. During the same period, new listings decreased 28.1% to 1,271 listings, active listings plummeted 64.8% to 765 listings, and pending sales decreased 17.8% to 1,276 pending sales. Monthly housing inventory fell 0.8 months year over year to 0.5 months of inventory. (information courtesy of ACTRIS)
National Market Update Winter weather slowed home builders’ activities in much of the country, making it difficult for them to keep up with demand. This drove New Home Sales down in February, though they’re still 8.2% higher than a year ago. It was a similar situation with existing home sales, with tight supply kept sales down for the month in spite of strong buyer demand. But, just like with new homes, Existing Home Sales are up versus a year ago, by a healthy 9.1%. February’s Pending Home Sales index of contracts signed on existing homes dropped for the second straight month, and is also down year-over-year by 0.5%, its first annual dip in eight months. Fannie Mae’s March Home Purchase Sentiment Index scored its biggest gain since June. Respondents who say it’s a good time to buy went from 48% to 53%, while those who feel it’s a good time to sell grew from 55% to 61%. The Mortgage Bankers Association noted: “lack of inventory…is preventing home sales from being much higher.” Mortgage rates remain below the 2019 average and Fannie Mae says they'll drift up only modestly this year. The National Association of Realtors chief economist notes, “Demand…does not yet appear to be impacted by recent modest rises in mortgage rates,” adding that rates in 2021 are expected to remain historically low. The Fed Funds Futures market is beginning to show a bit more of an expectation for change in the prime rate, as a few more Fed watchers think rates may rise the second half of the year, but the vast majority still feel rates will stay low for a very long time, as the central bankers keep saying. 7.2% expect a rise after the Jun 16 meeting and 6.9% expect a rise after the Sep 22 one.
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