Central Texas is on track for a record year for home sales, the Austin Board of Realtors said Thursday.
In its latest monthly report, the board said 2,378 single-family homes were sold changed hands in October, a 2.5 percent increase over October 2014’s volume. The median sales price was $252,790. That’s a 5.3 percent increase over the prior October, when half the homes sold for $239,990 and half for less.
The Austin area set a record last year with 27,794 homes sold across the region, the board’s figures show.
“We’re on pace for another record year,” said Barb Cooper, president of the Austin Board of Realtors. “While home sales typically slow each fall, housing demand has remained strong far past the typical peak selling season. This demand stems from strong employment and our area’s high growth rate—factors that help create a stable housing market.”
Year to date, Central Texas has had 24,884 home sales from January through October, the board said. Pending sales are up 4 percent, with 2,339 homes in the pipeline to close.
So far, sales have risen every month in 2015 year-over-year, except for May, the board’s figures show.
Demand has been outpacing supply for what has now been the longest prolonged period since the 1980s, said Eldon Rude, a longtime Central Texas housing market analyst.
And that imbalance, Rude said, “is directly related to an extended period of sustained job growth and people moving here. That’s at the heart of why we continue to see record home sales.”
Rude pointed out the Austin area has gained more than 20,000 jobs a year, for more than five years now.
“It’s a long period of strong economic growth that has resulted in a lot of people moving here and needing housing,” said Rude, principal of 360 Real Estate Analytics, an Austin consulting firm. “If we continue to have a strong economy, the housing market is going to remain strong.”
Shelly Hemingson, a Realtor with Keller Williams, has seen the boom first hand. Even with a slight slowdown in the fall and a small rise in interest rates, “houses that are priced competitively, especially those $350,000 and under, are going really fast,” she said. “We’re still seeing multiple offers, and a lot of my deals are cash deals, with buyers moving into Austin who are New Yorkers, Californians and international.”
That’s particularly the case in Central Austin, where buyers are willing to sacrifice space and pay more for a convenient location, Hemingson said.
“Fixer-uppers that are a little smaller are very much in demand,” she said. “I always encourage my buyers to get pre-approval from a lender because I can guarantee you there is going to be a multiple offer situation.”
Kristin and Steve Hamlett recently saw how fast the market can move. They put their house, in the Ridgelea neighborhood in Central Austin, up for sale on Oct. 1 in preparation for a move to the Mueller development.
“Six days after listing it, it was under contract for a little above the asking price,” Kristin Hamlett said. “We were surprised by how fast it happened.”
Strong housing demand coupled with a low supply of homes continues to push prices higher. Year-to-date, the Austin area’s median home sales price rose 9 percent, to $262,000, the board said.
Nick Zappitelli said he bought a starter home in 2008 in South Austin, paying close to $90,000. He sold it this year for roughly twice that amount, he said.
“The market has just exploded,” Zappitelli said. “It’s unreal.”
Zappitelli, director of public relations for International Studies Abroad, moved from Austin to Lexington, Ky., in 2012. This summer, he and his fiancée, Megan White, moved back to Austin, purchasing a house in the Rosedale neighborhood that they were able to buy for less than the asking price.
Zappitelli credits his real estate agent, David Brodsky, for helping the couple negotiate a lower price.
Brodsky, a broker associate with Keller Williams Realty, said the Austin housing market is expected to remain strong into the foreseeable future, despite the prospect of a bump in mortgage interest rates when the Federal Reserve meets in December.
“While I think it’s inevitable that rates are going to rise, I don’t think it’s going to skunk a very robust Austin market,” Brodsky said.
Rude said the impact on the housing market from rising rates “will be tied to how much they go up, and how quickly.”
In addition to job and population growth, another reason behind the strength of the market for pre-owned houses is that new home prices are sharply rising due to increasing cost of land, lots and labor, Rude said.
“The resale market is very compelling in terms of pricing,” Rude said. “It’s a viable alternative because new homes have gotten so expensive.”
Nationally, the housing market has had its best year since the recession. And sales of existing homes are expected to increase in 2016 at a moderate pace, although affordability pressures from inventory shortages and rising mortgage rates could slow the potential for even stronger sales momentum, Lawrence Yun, chief economist for the National Association of Realtors, said at a recent forecast event.