Real Estate Rumblings

Austin home sales skyrocket as prices finally begin to stabilize

Central Texas home prices are starting to stabilize, says ABOR.

Central Texas home sales soared in April, but, shockingly, prices did not, according to a new report from Austin Board of Realtors. After a somewhat sluggish start to 2019, single-family home sales saw a massive jump in April, climbing almost 15 percent over last year in the Austin-Round Rock metro area.

In the city of Austin, sales were a little more tempered, increasing 3.6 percent over 2018 with 889 sales, according to the April 2019 Central Texas Housing Market Report. Travis County, meanwhile, increased by 8.4 percent, selling 1,449 single-family homes last month.

Surrounding counties, however, are on a massive real estate roll. Hays, Bastrop, Williamson, and Caldwell counties all saw double-digit increases from last year. Hays' single-family home sales rose 17.2 percent with 302 sales, while Bastrop saw an increase of 11.1 percent, or 90 sales.

Growth in Williamson and Caldwell was even crazier; year-over-year increases in those counties increased 22.6 percent and 83.3 percent, respectively.

Despite the growth, it appears prices are starting to stabilize, a welcome trend, considering Austin's increasing affordability issues.

"In the first quarter of the year, the median price of a single-family home in the Austin-Round Rock MSA increased by just 0.2 percent, which is a much smaller margin compared to previous years. Between 2012 and 2015, we saw price increases as high as 9 percent," Kevin P. Scanlan, 2019 president of ABOR, said in release. “These narrower margins are a strong indication that market prices are starting to stabilize.”

Indeed, prices in both the city of Austin and Travis County increased just 1.1 percent to $394,450 and $379,250, respectively. In the greater Austin-Round Rock metro area, they increased to $320,000.

The stabilization comes, says ABOR, in part due to "smaller homes on smaller lots" and buyers increasingly searching outside the city limits.

“What we are seeing along the eastern crescent, from Georgetown to Buda on the south side of State Highway 130, is quite remarkable. In the last five years, annual home starts have more than doubled in this area,” Vaike O'Grady, Austin regional director of Metrostudy, said in a release. “At the end of March this year, nearly a quarter of new homes were on lots smaller than 50 feet wide.

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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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