Austin Housing Market Highlights
Transactions: 2,433 – decrease of 4.3% YOY
Median price: $291,500 – increase of 5.3% YOY
Inventory: 3 months – increase of 11% YOY (.3 months)
DOM: 53 days – increase of 5 days YOY
Active listings: 7,588– increase of 13.3% YOY
Price increases remain steady but sales have continued to slow: sales decreased 4.3% YOY. This was the first decrease in sales since March 2017.
Travis County sales dipped 8.6%, City of Austin decreased 4.1%, Williamson County increased 1% and Hays county remained unchanged YOY.
Aside from Austin, other areas contributing to the decline in Travis county were Lakeway and Lago Vista which experienced sales decreases of 26% and 23.5% respectively.
The decline in Lakeway transactions is probably due to its high median price, $480,000. Lago Vista has a history of high new home inventory and since new homes are more expensive than existing, on average, this is likely the reason for its decline.
Williamson county sales increased slightly, primarily due to the jump in Round Rock sales which saw an increase of 8.9%.
Why?… Round Rock is affordable.
And affordable inventory is getting gobbled up. Median price is $241,000 in Round Rock. Comparatively, in Cedar Park the median is $310,000. September sales decreased almost 10% YOY.
Statewide median home price was $225,000, or almost 30% less than Austin’s. Median price for existing homes in Austin was $297,900 compared to $203,400 for San Antonio.
Despite that gap you’re not going to hear me talk about “value” in Austin compared to other Texas metros. I’ve lived in most of them and I’ll take my kick in the pants when it comes to price. Austin delivers on quality of life and opportunity in my opinion.
Back to numbers…
New home median price registered a slight increase (less than 1%) YOY. This will continue to slow as builders try to capture demand for more affordable homes.
A perfect example is the Bella Fortuna subdivision southeast of Austin. It will feature 400+ new homes with prices from $225,000-$325,000.
Statewide median price per square foot (ppsf) was $121.55, a marginal decrease YOY. Statewide existing ppsf was $107.36. Austin came in at $145.37 for existing homes. I’m not moving to Corpus Christi for “value.”
On to the inventory…
Austin’s inventory increased slightly as sales have cooled over the last couple months. It remains well below 6 months, considered the mark of a stable housing market.
Williamson county experienced a 21% increase in inventory YOY, up to 2.9 months. This low value is primarily due to Round Rock which has a paltry 1.9 months.
Statewide inventory was 3.8 months for September, unchanged YOY. But new home inventory is 5.4 months and creeping higher.
Q3 saw Austin housing starts increase over 12.5% YOY. We’re currently on pace for over 16,000 starts this year, a 19% increase YOY. This is due to builders gearing up for the spring selling season. They typically ramp up activity in the late summer months, finish construction in early spring and close the sale mid-summer.
Texas permits and starts are slowing. The Residential Construction Leading Index slowed for the 6th straight month. This index estimates the timing and length of future upswings and downturns in Texas residential construction.
I’m curious to see how this high level of starts, most since 2007, plays out with sales next summer. Austin’s growing population needs homes and with existing home inventory so tight most people will have to buy new. But new homes are generally less affordable.
Despite posting the first sales decline since March, September was one of Austin’s best months this year in terms of economic growth. September saw a 7% increase, compared to 4% over the previous few months.
Austin lead the state metros in growth and far outpaced Texas growth of 4.7%. Job growth was the key contributor as Austin experienced a 10% increase (annualized).
In September Austin lapped the job growth of Texas (-.4%) and US (-.3%). The jobs surge was led by 3 sectors: transportation/wholesale trade, financial activities, healthcare and construction.
Austin’s private sector hourly wages grew in September to $28.48. This is well above the Texas average of $25.57 and US average of $26.46. However, the wage growth rate 3.2% is slightly less than Texas wages at 3.8%.
International exports from Austin are also growing. September saw a 9.4% increase in exports, a total of $10.7B. Most of these exports are computers and electronics with about half going to Taiwan and South Korea.
Texas trade weighted value of the dollar has been decreasing since 2015, making Texas goods more attractive to international consumers.
Other Austin Housing Notes
Austin home ownership is 53%, lowest among Texas metros. By contrast Dallas is 60.3%, Houston is 60.9% and San Antonio is 63.2%. The statewide average is 61.6%.
Georgetown is the only city in Texas entirely powered by renewable energy. Mayor Dale Ross made good on his promise two years ago to provide its residents with 100% renewable energy. Congrats to Dale.
Austin was recently ranked the #1 place in America to live for veterans. The rankings were composed of 4 categories: jobs, economy, quality of life, and health.
In a recent study of home buyers by Lending Tree, Texas had the lowest percentage or home owners looking to move out of state. It also shows that Californians are not just moving to Texas, in fact they’re more likely to move to Nevada. Check out the migration infographic: