Central Texas’ housing market continues to sizzle.
Sales of single-family homes in the Austin metro jumped 9 percent year over year in May, while the median sales price rose 8 percent, to $310,000, the Austin Board of Realtors said Thursday.
The dollar volume of May’s 3,170 sales topped $1.2 billion, making May the highest-grossing month in the region’s history, the board said in its latest monthly report.
May also was the first time this year that the dollar volume of sales exceeded $1 billion, the board said, noting that dollar volume topped $1 billion several times last year during the summer selling season.
“Housing demand continues to be at an all-time high in and around Austin, indicated by steady growth in home sales and prices, listing activity and housing inventory,” Brandy Guthrie, president of the Austin Board of Realtors, said in a written statement.
The strong gains in listings and supply, in particular, “are a positive sign that housing inventory could continue to increase throughout the aggressive summer selling season,” Guthrie said.
Within the city of Austin, the board reported 933 home sales, a 9.7 percent increase over May 2016.
Homes sales also were strong at the county level year over year, with single-family home sales soaring 14.8 percent in Hays County, 6.3 percent in Travis County and 8.3 percent in Williamson County.
Despite this week’s interest rate hike by the Federal Reserve, “the summer home market in Austin still looks great,” said Carol Dochen, founder of Carol Dochen Realtors. “We’re still seeing prices higher than ever before as we enter summer.”
Dochen said the Fed is “being wise” about the increases — Wednesday’s was the second rate hike in three months — “raising rates slowly so as not to incite panic among home buyers.”
“This was a minuscule increase so I don’t think it will have a big effect on Austin,” Dochen said, although she noted the increase might affect people “close to qualifying for purchases, those on the cusp of what they can afford.”
“In this case, they might have to adjust their expectations from a home to a condo or to a townhome,” Dochen said.
Eldon Rude, a consultant who tracks the housing market and regularly talks to builders, said “none of them have indicated that higher interest rates are negatively impacting their sales.” He said his most recent builder survey indicates that year-to-date sales in the Austin area through May are up more than 5 percent.
“If rates were to increase sharply later this year or next, history suggests that the first-time home buyer market will feel the greatest impact,” said Rude, principal of 360 Real Estate Analytics.
The recent surge in sales, coupled with rising home prices, led to May’s record for dollar volume. The $1.2 billion in sales was an 18.4 percent increase over May 2016, the board said.
Along with the 8 percent jump in the median sales price for the Austin-Round Rock region, the median rose 8.6 percent within Austin’s city limits, to $380,000.
At the county level, Hays County’s median rose 10.4 percent, to $262,250; Travis County’s median climbed 8.5 percent, to $371,000; and Williamson County’s median was up 6.5 percent, to $284,375.
The board said active listings surged 22 percent year over year, to 6,972 listings; new listings jumped 15 percent, to 4,369 listings; and pending sales rose 7.7 percent, with 3,437 sales in the closings pipeline.
Inventory also continued to rise in May, increasing to 2.8 months of supply across the five-county metro. However, there’s generally less than a one-month supply of homes priced under $250,000, Guthrie said, and the housing stock that’s being added is increasingly at higher price points.
Rude said demand has shifted in recent years, from homes priced above $350,000 to homes in the lower price ranges that are within reach of first-time buyers.
The areas with the most new home construction “continue to be those that offer the largest supply of more affordable homes,” Rude said, including Round Rock, Pflugerville, Hutto, Manor, Del Valle and the Kyle/Buda area.
“In Central Texas and around the U.S., the millennial generation has now emerged as a significant force in the market, and I don’t expect this trend to change anytime soon,” Rude said.