March housing madness: Austin continues to set price and inventory records
By Parimal M. Rohit – Staff Writer, Austin Business Journal
March Madness extended beyond the basketball court and into the residential real estate market, according to reports released by the Austin Board of Realtors and Redfin on April 15.
ABOR’s latest monthly real estate market report showed several records were set in the Austin metro — and the numbers aren’t favorable for those looking to buy a home in the Texas capital.
Housing inventory also continues to scrape near zero, according to ABOR. The city of Austin, for example, had 0.4 months of inventory last month. Travis and Hays counties were also at 0.4 months. The housing inventory for Williamson County, which is home to cities such as Georgetown and Round Rock, was at 0.2 months.
That’s putting stress on the north side, where one home recently had 85 showings that resulted in about 40 offers, said Jolene Weinstein, head of sales at Realty Austin. ABOR reports the average closing price in the Austin area is 108% of asking price. It’s not unheard of for a home in the $500,000 range to sell for about $100,000 above asking price, Realtors said.
Caldwell County southeast of Austin has the highest housing inventory: 1 month in March, exactly double the inventory of Bastrop County just east of Austin.
Median home prices in the metro hit a record high of $425,000 in March, up 29% year-over-year.
There was enough activity in March to make up for the loss of volume in Austin’s residential real estate market caused by the fallout from February’s catastrophic winter storm, ABOR’s report added.
More than 3,600 homes sold in March across the five-county Austin MSA — an all-time record for the month.
Austin’s year-over-year median home sales price increase was the largest in the nation, according to an April 15 Redfin report. Austin was one of three metro areas in the country with year-over-year increase of home median prices of at least 23% – the other two were Fresno, California, at 23% and North Port, Florida, also at 23%.
Austin, Fresno and North Port were “popular destinations for newly remote workers who have been leaving the most expensive metro areas during the pandemic in search of more affordable locales,” according to Redfin.
But it’s not just work-from-home — ABOR President Susan Horton said job creators are creating opportunities in Central Texas, making Austin a draw for people.
“The Austin-Round Rock MSA is one of the fastest growing in the country, people want to live here, and job creators see opportunity to be successful here,” Horton said in the ABOR report. “Austin is investing in infrastructure and businesses are working to harness this growth and opportunity, but with opportunity comes challenges. Our housing market is undergoing growing pains and creating a paradox — affordable from the outside looking in, but increasingly unaffordable for those who already call Austin home. While more homes are selling than ever before, it’s more and more difficult to find one.”
A recent Redfin report found that 45% of those searching for a new home in Austin lived in other metro areas. That marked a significant increase from January 2020, when 33% of users searching Redfin.com for a home in Austin were from other metro areas. The average budget for an out-of-towner buying a home in Austin last year was $852,276, which was 32% higher than a local homebuyer’s average budget of $644,771, according to Redfin.
Rising prices and shrinking supply can be seen across Texas, said Jim Gaines, an economist with Texas A&M’s Real Estate Research Center. Dallas-Fort Worth, Houston and San Antonio are experiencing similar home price growth due to high demand and low housing supply, Gaines said in the ABOR report, but Austin’s numbers are a bit sharper.
The median price for a home within the city of Austin last month was $514,000, a 25% year-over-year increase. That’s an all-time high for any month on record. Sales dollar volume for the Texas capital was $755.2 million, a 46% increase, year-over-year.
Median prices for homes in each of the five counties in March were as follows: $276,000 in Bastrop (5.8% increase, year-over-year); $250,000 in Caldwell (10.1% increase); $350,000 in Hays (25% increase); $490,000 in Travis (24.1% increase); and, $400,000 in Williamson (40.4% increase).
One realtor on the ground — Cody Cooper of Sprout Realty — said the only thing that might slow down the housing market is rising interest rates.
Fixed-rate mortgage rates were slowly creeping up nationally in March and into early April before dipping last week, according to Freddie Mac. The 30-year rate was at 3.05% the week of March 11 and increased to 3.09% by March 18. One week later, the 30-year rate rate was 3.17%. The rate peaked at 3.18% on April 1, before trending downward on April 8 (3.13%) and April 15 (3.04%). The 30-year rate was as low as 2.66% on Dec. 24, 2020.
Until those rates reach a point high enough to cool the market, pricing strategy will continue to keep the market hot, Cooper said. For example, his company will list a home on Thursday, which is the best day to put a new listing on the market. Prospective buyers will schedule viewings of the new listing into the weekend. Multiple offers will then be on the table before the end of Sunday.
If listed at the right market price, Cooper added, a seller should be able to sell his or her home for $50,000 to $75,000 over list price (and, in some cases, even more).
It’s not just Austin, however.
Redfin stated March was “the hottest month in housing history,” with several new records established nationwide. The national median home-sale price was $353,000, up 17% from 2020, according to Redfin. Austin Business Journal Article…