Sticker Shock

This tiny East Austin house has a huge list price of $450,000

Tiny East Austin Home 1906 East Second Street $450,000

1906 Second St.

Photo Courtesy of Trulia

KVUE — A 410-square-foot blue house on East Second Street with one bedroom, one bathroom and window unit air conditioning is being listed on AustinRealEstate.com for $450,000. Yvonne Esparza, the realtor for the property, said the asking price reflects Austin's high demand for housing and low supply.

"Real estate is location, location, location," said Esparza. "Several years ago, you could buy a house out here for $29,000. And, really, the value has gone up a lot."

"A lot" is an understatement. According to Travis County tax appraisal records, the property was valued at $7,030 in 1993. In 2014, it was valued at $202,961. This year, its value is $267,414.

"I figure, somebody's just shooting for the sky and seeing if somebody buys," said Felipe Estrada, who lives across the street. "It was placed on the market probably three or four years ago and it was on the market for almost $200,000, and I was surprised that it sold at that price."

The prices homes sell for directly affect property values. Residents on East Second Street not only have one house going for $450,000, but the house two doors down is listed for $550,000. Another house across the street is selling for nearly $700,000.

"It is concerning. It just makes it more challenging to save and pay every year," said Estrada.

The little blue house has been on the market for 151 days, more than double the average time for Austin. Esparza said if the seller doesn't get the asking price, the owner will tear down the home, build on the lot and sell the new home.

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local real estate report

Homebuyers can afford to be picky as Austin housing inventory rises

Photo by Avinash Kumar on Unsplash

Housing economist Clare Losey said the most significant factor affecting home sales in Austin is high mortgage rates.

The latest real estate report from Unlock MLS and the Austin Board of Realtors (ABoR) has revealed housing inventory is still on a steady rise in the Austin-Round Rock-San Marcos MSA, creating more choices for potential homebuyers as they navigate a high interest rate market.

Residential home sales dipped by a mere 1.5 percent year-over-year from October 2023, amounting to 2,248 closed sales in the Austin-Round Rock-San Marcos MSA. Median prices have also dropped to $430,000, or 3.2 percent less than this time last year. More than 3,300 new home listings were added on the market — a 7.4 percent increase from 2023 — bringing the total number of active home listings to 11,599.

According to Unlock MLS and ABoR housing economist Clare Losey, Ph.D., October's mortgage rates stood at 6.4 percent and are showing no signs of a significant drop in the near future. Even heading into 2025, Losey says potential homebuyers who are biding their time in the hopes of seeing rates plummet "may be in for a long wait."

"In the meantime, sellers must recognize that bringing buyers to the table requires a more aggressive pricing approach," Losey said. "Even in a more balanced market, buyers with limited purchasing power are struggling to meet current price expectations."

As for the overall health of the Central Texas housing market, 2024 Unlock MLS and ABoR president Kent Redding labeled recent news reports that called Austin "ground zero" for a downturn as an "extreme over-exaggeration."

"Austin led the state and nation in record-breaking home price growth and sales activity during the pandemic," Redding said. "For three years, near-zero housing inventory, numerous offers above list price and a rapid-paced market raised home prices and left little negotiating power for buyers. During this record-setting growth, ABoR and Unlock MLS consistently emphasized the unsustainability of the rapid growth, and now, our market is working to balance those extremes."

Central Texas housing trends in October 2024

In Travis County, 979 homes were sold last month — a slight 2.5 percent increase from last year. Median prices remained flat year-over-year at $510,000. Active home listings continued growing to 5,702 homes, which is 9.4 percent more year-over-year.

In Williamson County, 807 homes were sold in October, with median prices steadily dropping to $420,000. There were 1,028 new home listings on the market, showing a 4.5 percent increase from October 2023, bringing the total number of active home listings to 3,369.

Residential home sales dropped by nearly eight percent in Hays County in October, totaling 315 sales. Median prices also fell 5.5 percent year-over-year to $359,000. Active listings rose 6.6 percent year-over-year to 1,740 homes with the addition of 534 new listings on the market.

Meanwhile, 114 homes were sold in Bastrop County last month, which is 4.4 percent more than this time last year. Median prices dropped by a single percentage point year-over-year to $355,000. There were 654 active listings on the market in October, and 152 new home listings, representing a 1.3 percent slip in new inventory when compared to last year.

Only 33 homes were sold in Caldwell County in October to reflect a near 14 percent decline year-over-year from October 2023. Median prices fell to $262,990, which was a 13.5 percent decrease from last year. There were 136 active homes on the market last month, and 40 new homes added on the market.

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