Central Texas starts 2017 with gains in residential home sales volume. The five county MSA in 2016 sold over 29,000 single-family homes. That is a 3.9 percent increase from 2015 and an ALL-TIME HIGH for annual home sales volume.
Going into January, we did face rough conditions of only 2.0 months of inventory available. This has caused an outward push of sales from Austin into the surrounding cities, shifting the price range of available homes in local neighborhoods upward and leaving the inventory critically low everywhere. The surrounding counties are now on pace with inventory levels of the City of Austin.
“The Central Texas housing market is slowly beginning to align with long-term historical trends. Homes are spending more time on the market and the pace of both home sales and price growth is slowing,” said Brandy Guthrie, 2017 President of the Austin Board of REALTORS®.
“Low inventory levels, high home prices and slowing job growth across the region are preventing a resurgence of the record-breaking numbers experienced the last two years, but overall the region’s housing market remains very strong.” Said Mark Sprague- Independence Title.
January- housing inventory levels remain even across the Austin-Round Rock MSA; 2.0 months of inventory; Prices climb steady; Median price $279,900 (increase of 7% year-over-year in to 1,549 home sales).
February- starting to see a slowdown in single-family homes sales growth across the Austin-Round Rock MSA: indicating stabilization of the market; Median price $289,000; (increase of 0.9% year-over-year to 1,829 homes sales). Home sales declined this month in many surrounding cities, with the exception of Buda, Cedar Park, Leander and Austin.
March- Single-family home sales are starting to decline across the Austin-Round Rock MSA while the home sales increase in the City of Austin; increasing the median price up 5.6% to $295,767; housing inventory levels increase to 2.4 months. “NAR reported an increase in listings and almost half of homes put on the market are selling within one month”, said Larry Bahr with Market Alert.
The demand coupled with consistently low inventory has led developers, builders and investors to place townhomes and condo communities, duplex/fourplex, mid-rise condo and smaller single-family homes as the solution to increase the density throughout Austin and into the surrounding counties of the suburbs. Proposed zoning changes could affect the continued growth outcome of these Austin and surrounding areas.
So in all, the TIGHT market is largely due to the lagging supply, not a surge of demand. Low interest rates remaining low, hovering around 4.25%, are still enticing buyers to play in this market.