Austin Real Estate Update | October 2021
I hope this finds you healthy and in good spirits! Autumn is here and as the temperature cools a bit so has the market from the blistering start from the year. It generally feels like a return to our normal market conditions now, which isn't a bad thing as it is a bit easier to navigate. 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!
Sales activity reflects typical seasonality, price gains maintained
According to the Austin Board of REALTORS® (ABoR) August 2021 Central Texas Housing Report, home sales decreased 4.6% compared to August 2020. The data indicates the market is calming as typical seasonality has returned in terms of number of closings, even as median sales prices maintained the gains made over the course of 2021. Despite setting a record for the month of August with a median sales price of $470,000 across the MSA, prices are no lo nger increasing at a significant rate month to month.
As residential home sales in the Austin Round-Rock MSA declined 4.6% to 3,849, the median sales price jumped 34.7% year over year to $470,000—a record for the month of August. Sales dollar volume increased 18.7% year over year to $2,208,535,793. Monthly housing inventory dipped 0.3 months to 1.0 months of inventory compared to August 2020, the highest level of inventory across the MSA since October 2020.According to Mark Sprague, economist, and the state director of information capital for Independence Title, Austin’s market is exactly where it should be based on demand. “There have been reports of Austin’s housing market being overvalued, but from an economist’s perspective, my question is, ‘overvalued compared to what?’ The Austin market is robust, and sales activity and pricing have been driven by true demand. A combination of events, including increased job creation in the market, low interest rates, shifting priorities for perspective buyers, and in many cases, increased personal savings following stay at home orders during COVID, are why the Austin MSA is a top market in the country. When there is this much demand, it is difficult for an entire market to be considered overvalued.” Sprague pointed to Austin’s economy outperforming most of the nation with job creation and single-family permit applications as key indicators: “Austin’s economic resiliency has led the MSA to be a leading market in the nation in terms of single-family permit applications for new construction. The national average for permit applications is down 31% compared to peak applications during 2002-2008, but the Austin area is up 28%. The bottom line is that Austin’s market can be challenging, there are still many opportunities to find the right home and build equity.” Last month, new listings increased 14.1% to 4,409 listings; active listings declined 19.1% year over year to 3,380 listings; and pending sales decreased 8.6% to 3,970 listings. Homes only spent an average of 14 days on market last month across the MSA, a decrease of 30 days from the year prior. City of Austin In August, home sales ticked up 0.2% to 1,244 sales, while the median home price rose 27.1% year over year to $540,000—a record for the month of August. During the same period, sales dollar volume increased 20.9% to $812,406,833 as new listings increased 2.7% to 1,345 listings. Compared to August 2020, active listings dropped 27.7% to 1,048 listings, and pending sales decreased 6.9% to 1,201 pending sales. Monthly housing inventory decreased 0.5 months year over year to 0.9 months of inventory. Travis County In Travis County, home sales also decreased 3.7% to 1,935 sales, and sales dollar volume climbed 10.7% to $1,278,954,470. The median sales price increased 25.5% year over year to $527,000 as new listings increased 4.7% to 2,134 listings and active listings declined 22.1% to 1,728 listings. Compared to August 2020, pending sales decreased 11.4% to 1,914 pending sales as the inventory decreased 0.4 months year over year to 1.0 months of inventory. Williamson County In August in Williamson County, home sales decreased 4.2% to 1,314 sales, while sales dollar volume increased 36.6% to $642,737,607. Median prices rose 46.6% to $441,000, and new listings climbed 23.6% to 1,434 listings. During the same period, active listings declined 7.4% to 1,005 listings, and pending sales fell 6.3% to 1,348 pending sales. Housing inventory ticked down 0.1 months year over year to 0.9 months of inventory. (information courtesy of ACTRIS)
National Market Update With rising home values, Black Knight reports U.S. homeowners sat on a record $9.1 trillion in tappable home equity in Q2. They took more than $63 billion of that in cash-out refinances, the most since 2007. Folks still renting not only miss out on that equity gain, they also face higher rents. According to Yardi Matrix, rents rose nationally in June to a record average of $1,482--a 6.3% year-over-year gain, the largest in the firm's history. Latest data from Yardi Matrix shows asking rents in August surged 10.3% year-over-year, the first time annual rent growth hit double digits in the firm’s history Construction Spending for July was up overall. Since some sectors were down, the increase was largely due to a big gain in residential construction, up 0.5% from June and up a strong 26.5% from July 2020. Inventories will be helped by a 3.9% hike in Housing Starts in August, all due to multi-family projects. That will add to the supply of condos/coops for sale, but some units will be rentals, taking advantage of rapidly rising rents. At last week’s presser, Fed chair Powell indicated they’re likely to announce tapering of their monthly bond purchases at the November meeting. He said that could end by mid-2022, but we shouldn’t expect any rate hikes until tapering is done.
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