Central Texas homes sales retreated in February, with sales increasing less than 1 percent year-over-year, the latest figures show.
The median price for the metro area, however, climbed 6.5 percent, to $287,000, the Austin Board of Realtors said in its monthly report Thursday.
Within Austin’s city limits, sales rose 6.4 percent over February 2016, the board’s figures show. The median sales price in Austin was flat year-over-year, with half of the homes selling for less than $330,000 and half for more.
Overall in the Austin metro area — which spans from Georgetown to San Marcos — sales were basically flat, rising only 0.9 percent, the board said. That was the smallest gain for February since 2009, when sales plunged 29 percent year-over-year amid the national housing crisis.
Board officials said February’s flat sales — 1,829 in total — indicate the Central Texas housing market is beginning to stabilize.
“The Central Texas housing market is just now beginning to catch up to itself after years of unprecedented sales growth,” Brandy Guthrie, president of the Austin Board of Realtors, said in a written statement. “It’s important to remember that current figures are being compared to very strong housing market activity in 2016, so a decline in home sales growth does not automatically mean that the market is softening.”
Mark Sprague, a housing expert with Independence Title in Austin, agreed.
“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.”
Single-family home sales declined from February 2016 in many cities near Austin, with the exceptions of Buda — up 30 percent year-over-year; Cedar Park — up 20.7 percent; Leander — up 8.8 percent; and the city of Austin.
Austin’s sales growth is being driven mainly by the volume of homes priced $750,000 and higher, Guthrie said.
Even with affordability an ongoing concern in the Austin area, where home prices continue to rise faster than incomes, “so far this disparity has not slowed the pace of sales,” said housing expert Eldon Rude, principal of 360 Real Estate Analytics, an Austin-based real estate consulting firm. “What it has done is force buyers to make trade-offs regarding location, size of home, and the age or condition of the home they purchase.”
February’s slower sales could be an indicator of what local experts have forecast — that this year will be another strong one for the local housing market, through perhaps not as roaring as 2016, when sales set a record for the sixth straight year.
“We’ve started off to what looks like will be another strong market, though not as insanely robust as years past,” said Austin broker Eric Bramlett. “The pent-up demand from the recession years is long gone and builders are finally getting more inventory on the ground, though not enough to keep up with our strong population growth. The result is a healthy market that’s appreciating at a normal 5 percent to 7 percent rate. Comparative to years past, this feels like a slowdown, but we’re really seeing a return to normal price appreciation that a world-class city like Austin tends to take for granted.”
Tony Trungale, a vice president with Regions Mortgage in Austin, said he does not expect this week’s interest rate hike by the Federal Reserve to have much impact on long-term fixed mortgage rates.
“These days the Fed chair announces their plans to raise rates far enough in advance that mortgage market has already adjusted upwards by the time of the actual adjustment actually happens,” Trungale said.
Rude said the Texas Workforce Commissions’ revised 2016 job growth numbers last week are the main reason he remains bullish on the local housing market. The new figures show the region added over 32,000 jobs, a 3.3 percent growth rate, instead of the a 1.9 percent rate initially reported.
Carol Dochen, an Austin real estate broker, said the spring market “is proving to be just a robust as last year.”
“You will see lots of homes coming on the market during these next few months and I am sure the market will continue to increase in price,” Dochen said. “In the last seven days, the Austin Board of Realtors reports that958 homes came on the market and 1,007 went pending during the same period and 664 closed — all in one week.”
In the Dripping Springs area west of Austin, Freehold Communities said 50 to 60 prospects a week, on average, are visiting the model homes at its new Headwaters subdivision. Once completed in seven to eight years, Headwaters will have 1,000 homes and more than 1,000 acres of open space.
Currently, 26 homes are completed or under construction, with the first residents due to move in March 23. Prices range from the high $300,000’s to over $700,000.
“Net migration counts lead us to believe that strong demand for housing in the Austin metro area will continue for the near future,” said Matt Matthews, Freehold’s Texas division president.