Austin Real Estate Update | June 2021
I hope this finds you healthy and in good spirits! Summer is around the corner and the market is still tight but, as is typical, inventory has expanded a bit as it has warmed up which has made it a bit better to navigate. There is certainly plenty of demand and houses that stand out are still going well over list, but there have been opportunities to secure homes at or just a few percentage points over list as well. 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!
Market shows strong recovery from shelter-in-place orders last spring
The booming Austin-area housing market continued to demonstrate strength in April, with soaring double-digit growth in both home sales volume and median price growth. The Austin Board of REALTORS® April 2021 Central Texas Housing Report is the first market report to provide a direct comparison to the housing market during the COVID-19 pandemic.
Residential home sales in the Austin Round-Rock MSA hit a record for the month of April, increasing 37.2% year over year to 3,604 sales, while median sales price rose 41.6% year over year to an all-time-high of $460,000. As a result, sales dollar volume topped two billion in April, skyrocketing 95.5% year over year to $2,065,570,878. Homes spent an average of 17 days on market, or 28 fewer days than in April 2020.
As I mentioned in the header, Austin area inventory was a bit higher in April than in March, and the rush on the housing market from the beginning of the year could be easing, given the pace of appreciation from month to month is slowing. It's still very common to submit several offers before an acceptance, and offers still require some creativity and atypical aggressiveness in terms.
John Schutze, regional director and senior home loan officer at Texas Loan Experts (and one of the lenders I refer clients to), stated that purchasing a home in the Austin area today requires more of an upfront investment than ever before. “Homebuyers are having to get creative as the Austin housing market continues to be competitive. Potential buyers must be prepared to have a source of extra funds to make up for potential appraisal shortages but also need to understand that cash isn’t always king when it comes to catching a seller’s eye. As interest rates look to hold steady for the foreseeable future, buyers need to be prepared for the long haul and need to work with a REALTOR® who can help explain the need to be bold and also help you put together the most attractive offer depending on the home and situation.” In April, active listings fell 69.5% year over year to 1,901 listings. Consistent with the first months of 2021, housing inventory fell 1.5 months from April 2020 to 0.5 months of inventory. During the same time frame, pending sales jumped 50.4% to 3,920 pending sales and new listings increased 32.6% to 4,654 new listings. In the city of Austin, low levels of inventory drove the median home price up 31.7% year over year to $550,562—an all-time high for any month on record. Home sales increased 51.4% to 1,167 sales, an all-time high for the month of April, as sales dollar volume soared 100.8% to $782,329,568. During the same period, new listings increased 33.3% to 1,545 listings, active listings decreased 57.2% to 683 listings, and pending sales jumped 64.5% to 1,273 pending sales. Monthly housing inventory decreased 1.0 months year over year to 0.6 months of inventory. At the county level, home sales increased 46.8% to 1,813 sales, while sales dollar volume spiked 104.4% to $1,226,240,023 in Travis County. The median price for homes increased 37.8% year over year to $537,500 as new listings increased 30.9% to 2,336 listings. In April, active listings declined 64.1% to 1,029 listings and pending sales rose 52.5% to 1,930 pending sales. Monthly housing inventory decreased 1.2 months year over year to 0.6 months of inventory. In Williamson County, April home sales increased 34% to 1,219 sales, and sales dollar volume soared 92.3% to $573,488,436. The median price rose 45.4% to $430,000 and new listings increased 37.8% to 1,576 listings. At the same time, active listings dropped 73.5% to 537 listings while pending sales jumped 42.7% to 1,297 pending sales. Housing inventory declined 1.5 months year over year to 0.5 months of inventory. (information courtesy of ACTRIS)
National Market Update A national online real estate database predicts 2021 will see $2.53 trillion of home sales, which would be a record high. If attained, it would be a 17% hike over 2020, the biggest yearly percentage gain since 2013. A recent financial well-being report found that 43% of homeowners planned to sell in 2020 or 2021, but just 10% did last year. However, 77% of these folks plan to list their homes in 2021, pointing to a much-needed rise in inventory. April’s Pending Home Sales Index of existing home contracts dipped, but the better-supplied higher-end market is still moving up. All inventory should gain by fall, with more homeowners comfortable about listing. Home prices saw the largest yearly gain since 2005 (13.2%) in the Case-Shiller index, and the biggest annual gain ever (13.9%) in the FHFA index. April’s average sale-to-list price ratio shot past 100%, to a record high 101.6%. After their March boom, Housing Starts slipped in April yet remain above the critical 1.5 million annual rate. Plus, Building Permits rose to 1.760 million annually, near their highest level since 2006. New Home Sales also dropped in April, but are still up 18% from pre-pandemic levels. Lumber costs now add $36,000 to the cost of an average single-family, while government regulations account for $93,870 (23.8%!) of the average sale price. Freddie Mac recently stated that "the low mortgage rate environment has been a boon…but may not last long as inflation has accelerated at its fastest pace in more than twelve years and may lead to higher mortgage rates in the summer." The Fed views current inflation as "transitory," and stays laser-focused on a full jobs recovery, which they feel is still a long way off.
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