Austin Real Estate Update | September 2021
I hope this finds you healthy and in good spirits! Summer is here and in full effect - stay cool out there. The market has continued to roll along, and there are still multiple offers for many homes, but it does feel like it is calming a bit, which is good. 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 Residential home sales decreased across the Austin-Round Rock Metropolitan Statistical Area (MSA) for the first time since May 2020, according to the Austin Board of REALTORS® July 2021 Central Texas Housing Report. Despite the dip, the five-county MSA was just 445 homes shy of breaking the all-time home sales record set in July 2020.
As residential home sales in the Austin Round-Rock MSA declined 9.9% to 4,041, the median sales price jumped 37.1% year over year to $480,000—a record for the month of July. At the same time, sales dollar volume increased 20.7% year over year to $2,409,491,114. Monthly housing inventory dipped 0.8 months to 0.9 months of inventory. While the inventory remains well below a healthy average, inventory has slightly increased since the first half of 2021.
Vaike O’Grady, regional director of MetroStudy, said that while the frenzy to buy a home in Austin has steadied from this time last year, it’s unlikely that home prices will go down any time soon. “Austin is always considered one of the top places to live in the U.S., but we’re losing ground due to shrinking housing inventory and affordability. With construction delays and regulatory barriers, builders and developers are having increasing difficulty getting new homes on the ground. Because of that, there’s not enough supply coming to the market to significantly impact available inventory, which further pushes prices up. Looking ahead, there will likely only be new inventory available further out in the suburbs; meaning, other submarkets may gain traction over Austin.” In July, new listings increased 8.2% to 5,166 listings; active listings dropped 36.9% year over year to 3,294 listings; and pending sales declined 11% to 3,900 listings. Homes only spent an average of 12 days on market last month across the MSA. In the city of Austin, the median home price rose 37.6% year over year to $574,975—a record for the month of July. Home sales decreased 10.2% to 1,304 sales, while sales dollar volume increased 15.8% to $903,215,913. During the same period, new listings decreased 3% to 1,608 listings, active listings dropped 35.2% to 1,066 listings, and pending sales decreased 10.2% to 1,214 pending sales. Monthly housing inventory decreased 0.8 months year over year to 0.9 months of inventory. At the county level, home sales also decreased 12.1% to 1,954 sales, and sales dollar volume jumped 14.7% to $1,379,355,724. The median price for a home increased 34.4% year over year to $551,000. During the same period, new listings increased 2.1% to 2,566 listings; active listings declined 34.5% to 1,745 listings; and pending sales decreased 11.2% to 1,935 pending sales. Monthly housing inventory decreased 0.7 months year over year to 1.0 months of inventory. (information courtesy of ACTRIS)
National Market Update Fannie Mae, which backs conventional mortgages, announced it will factor rental payment history in its underwriting decisions starting September 18. This is a boon to renters seeking to become first-time homebuyers. Annual apartment rent growth hit new highs in July, according to real estate software and data analytics company RealPage. The U.S. monthly average was $1,549, an 8.3% annual gain. Residential construction spending rose to an annual rate of $763.4 billion in June, 1.1% over May’s level, and 8.2% over a year ago. This big gain in home building kept overall construction spending in positive territory for the month. Housing Starts fell 7.0% in July, yet remained above the needed 1.5 million annual rate. Supply chain and labor issues are causing monthly volatility, but the 12-month moving average is at the fastest home building pace since 2007. The backlog of authorized projects not yet started stayed near its highest read since 1999, yet Building Permits rose in July for the first time in four months. This indicates builders expect demand will remain strong Realtor.com’s Weekly Housing Trends put the median listing price 8.9% over last year, the first time annual price growth was below 10% in more than 50 weeks. But sellers can take heart that prices are still growing, if at a slower rate. For buyers, price growth has dropped to about half its 17.2% year-over-year pace in April. Plus, new listings were up 5%, and though they’re still below 2019’s more normal pace, the gap is shrinking. The Fed Funds Futures market still sees no rate hikes for the rest of the year. Last week's Fed minutes indicated it may start tapering bond buying by the end of 2021. But analysts say the Fed would have to end that program before hiking rates, which some put off until the beginning of 2023.
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