Austin Home Sales Drop

Austin home sales dip again because first-time buyers can't afford houses

Austin home sales dipped for second month in a row.

For the second consecutive month, Austin home sales have dropped. In July, the Austin Board of Realtors reported a drop in sales for the first time in three years, a trend that continued through August, according to a new report by ABoR.

The report points to a few factors causing this downward trend. The first is the $311,414 average price tag for a single-family home, a 9 percent increase over last year. The second is a population that is unable to afford these rates. According to ABoR President Bill Evans, "A majority of Austin-area homes are now priced out of an affordable range for first-time and first-time move up homebuyers, where a significant portion of home sales volume occurs."

ABoR also cites a lack of inventory as a reason for the slow down. Though active listings did increase 10 percent from 2013, monthly housing inventory remains at only three months. According to the Real Estate Center at Texas A&M University’s, a balanced market is a housing inventory level of 6.5 months.

In the report, Evans also sends out a call to action to area voters, saying, "We need a regulatory environment that supports the development of affordable housing stock for the future stability of our Austin housing market. As we prepare for the new districted Austin City Council this November, ABoR encourages voters to seek leaders that will address our housing and development challenges."

The report also released the following statistics:

2,835 — Single-family homes sold, 4 percent less than August 2013
$247,500 — Median price for single-family homes, 11 percent more than August 2013
$311,414 — Average price for single-family homes, 9 percent more than August 2013
42 — Average number of days single-family homes spent on the market, one day fewer than August 2013
3,310 — New single-family home listings on the market, 4 percent more than August 2013
6,707 — Active single-family home listings on the market, 10 percent more than August 2013
2,430 — Pending sales for single-family homes, 1 percent more than August 2013
$882,858,690 — Total dollar volume of single-family properties sold, 4 percent more than August 2013

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Eviction Notice

Major landlords with Austin ties being investigated for illegal rent hikes

Photo courtesy of KVUE

Some of Austin's rent woes could be a result of this alleged scheme.

The Justice Department (DOJ) is suing six of the country's largest landlords, along with RealPage, alleging they took part in a pricing scheme that harmed renters.

We already know the increase in population and businesses moving to Austin raised rental prices. But lawyer and owner of Texas Tenant Law Jennifer MacGeorge said the new DOJ lawsuit could prove illegal rent hikes made it even worse.

"It's about collusion versus competition," MacGeorge said. "It's just about trying to gouge the market and get as much as they can."

The antitrust lawsuit claims six property management companies — Cushman & Wakefield, LivCor, Cortland, Greystar, Dallas-based Willow Bridge, and Houston-based Camden, which have numerous locations in the Austin area — are using software like RealPage. Together, the landlords control 1.3 million apartment units.

According to the lawsuit, the software uses an algorithm to help set rents and privately share sensitive, non-public information with competitors, allowing landlords to align their prices and avoid competition.

MacGeorge said the result is higher rents, for not only residential but commercial properties. She said this type of behavior exacerbates affordability issues and displaces residents and small businesses.

"We're getting rid of people that help the economy sustain itself and be stable, which is what everybody's looking for in this environment where you can't even afford your groceries, and now you're worried about your rent. It's absolutely unacceptable," MacGeorge said.

The lawsuit names the Austin-Round Rock metro area multiple times, saying 30 percent or more of the residential properties in the area are using this type of software.

While MacGeorge mainly represents tenants, she found out some of her landlord clients are using similar pricing strategies to artificially raise prices.

"They are engaging in other practices that are artificially raising prices, such as putting in a rental rate at a renewal that's maybe 20 percent above what the tenant was paying before and leaving it that high only until the tenant moves out and then immediately dropping it," MacGeorge said.

Read the full story and watch the video at KVUE.com.

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