Transactions: 2,292 – increase of 2.2% YOY
Median price: $286,742 – increase of 4.3% YOY
Inventory: 2.8 months – increase of 8% YOY (.2 months)
DOM: 55 days – increase of 3 days YOY
Active listings: 7,083 – increase of 12.6% YOY
Home sales in the Austin-Round Rock MSA rebounded slightly in October after a decrease in September. The City of Austin actually experienced a slight decrease in transactions, down 1.7% YOY.
Overall sales in Travis county remained relatively flat with 1.4% increase from a year ago. Alternatively, Lago Vista sales increased over 70% compared to last October. Houses are finally selling there after several years of surplus inventory.
In Williamson county the number of transactions increased 5.4% YOY with help from Cedar Park. Cedar Park saw an 18.2% rise in sales, with 104 transactions. Sales in Leander remained relatively flat, growing 1.1% and Georgetown saw a 4.9% decrease.
Hays county sales climbed 6.2% compared to last year. This was hardly noteworthy until I saw that sales in San Marcos surged almost 70%. I wish I had data, anecdotal or otherwise, to explain it but I don’t.
Now to everyone’s favorite water cooler topic… price.
The metro median price in October was $286,742. This was a 4.3% increase YOY but a decrease compared to the last couple months where median price hovered around $300k with a high in June of $314,000.
However, median price of Austin surged to $360,000, an increase of 9% from last year. Austin’s jump in median price seems tame compared to the increases seen in Manor, Lakeway and Lago Vista. Manor’s median increased 18%, while Lakeway and Lago Vista saw 14.6% and 25% gains YOY.
Travis county and Williamson county saw a 5% increase and Hays saw growth of 6.5% YOY. Strong numbers considering appreciation had slowed in recent months.
Texas by comparison has a median price of $226,000.
Just to elaborate on the gap between Austin and the other metros: median existing home price for San Antonio is $199,000 while in Austin it’s $292,000. Houston is closer to San Antonio at $223,000 while Dallas has seen a significant increase to $272,000.
Austin also leads the state in price per square foot (ppsf) at $140 for new homes and $147 for existing. Comparatively the State average ppsf is $122.
What about the inventory…
Overall, it’s still pretty low at 2.8 months for the Austin-Round Rock metro. That’s a slight increase YOY. The City of Austin and Travis county experienced similar slight increases to 2.3 and 2.7 months respectively.
Listings in Austin-Round Rock had a more notable surge of 12.6%. This follows the trend over the last few months as sales have slowed slightly. Days on market (DOM) is following the same trend, increasing slowly.
Active listings in Williamson county are not increasing slowly. They went up 27% YOY. Inventory increased .6 months to 2.8. Despite the increases in listings the lack of affordable inventory will allow Williamson county to easily absorb the increase. Builders cannot keep up with the pace.
Active listings in Hays county grew 11% in October and the situation is similar to Williamson. Anything remotely affordable will be sold in 60 days. Hays remained steady at 3.2 months of inventory. Still well below 6 months, considered the mark of a stable market.
The state inventory is 3.7 months.
Now to construction activity:
Texas housing starts had a major rebound in October, up 16.3 YOY. Builders are gearing up for a big spring selling season. Demand is still high and they know anything around $300k in the Austin area will sell fast.
Houston rebounded after the storm season and is once again leading the nation in housing permits. Dallas-Fort Worth is ranked 2nd.
Housing permits and starts were up across Texas, signaling a busy spring and summer for residential construction. This led to Texas Residential Construction Leading index growth for the first time since March.
In October the Austin Business Cycle Index grew at 7.3% annualized. Unemployment fell to 2.6%, an 18 year low and jobs increased at 4.5%. Texas and US unemployment are 3.9% and 4.1% by comparison.
In the 2nd quarter of 2017, high tech employment increased 4.7% and tech services employment expanded 6.2%. Tech and manufacturing have been the driving forces behind the last couple months of Austin’s growth.
But despite the job growth and economic expansion, wage growth has remained stagnant. Hourly earnings grew .8% YOY in Austin compared to Dallas and San Antonio at 2.4% and 2.1% respectively.
Couple that with the fact that housing prices continue to outpace wage growth by a considerable margin. This brings up the tired question of affordability in Austin.
In my opinion Austin is moving towards the large Californian cities like San Francisco and Los Angeles. Blue collar workers will find it harder to find affordable housing in the future. This will cause those jobs to slowly leave Austin for San Antonio, Dallas-Fort Worth and Houston.
And that’s fine.
Let me clarify. I don’t want them to leave, it’s just going to happened naturally. Austin will continue to be the tech hub of Texas and trying to keep manufacturing jobs here doesn’t make sense. Besides, San Antonio is just down the road and is still a bargain comparatively.
Tech company wages will push lower income earners out of Austin to other metros. But trust me tech companies aren’t dying to get into San Antonio.
Tech is a very tight knit sector. They work, eat and play together and that will keep them coming to Austin. The culture they prefer doesn’t exist in those other metros.
There has been quite a bit of buzz concerning the potential of a Major League Soccer franchise moving to Austin. Ownership of the Columbus Crew is considering two possible stadium locations.
A New York based private equity fund just invested in a San Antonio company that sells water.
According to JLL, South Congress is the 10th most expensive stretch of commercial real estate in the country. The area commands an average of $58/ft.