Central Texas’ housing market is off to a strong start for 2017, an industry expert said Wednesday.
Eldon Rude, an Austin-based housing market consultant, said 26 production homebuilders he tracks reported generally healthy sales for both January and February, “and that bodes well for the spring market.”
“We’re in pretty good shape,” said Rude, addressing about 100 business professionals at a monthly luncheon of the Austin Mortgage Bankers Association at the Austin Country Club.
Rude is principal of 360 Real Estate Analytics, whose clients include builders, bankers and other industry professionals.
Consumer confidence, low unemployment and other indicators point to continued strength in the Austin-area housing market this year, Rude said. That’s despite the region’s slower job growth, which at 18,800 jobs for the 12 months that ended in December is half of what it had been for several prior years running. Job growth is a primary catalyst for housing demand.
Consumer confidence is up, with people generally generally feeling better about their financial situations, and that’s a positive omen for the housing market, Rude said.
Although the influx of newcomers to the region has slowed a bit, people continue to move here in large numbers, adding to housing demand, Rude said. About 24,000 single-family homes and apartments were built in the Austin region last year.
Rude said Central Texas is still playing catch-up when it comes to housing supply, which is at critically low levels in some areas of the region, the Austin Board of Realtors has said.
Central Texas has seen 53 straight months where the supply of homes has been less than four months, creating “an extreme imbalance” in the supply and demand equation, Rude said. A supply of six- to 6.5 months is considered a market where supply and demand are in balance.
As of February, all price ranges below $750,000 had less than four months of inventory, Rude said, and the supply of available homes in the $200,000 to $300,000 price range was only 1.3 months.
With such a sizable gap between supply and demand, “prices are going to go up. It’s a foregone conclusion,” Rude said.
The median home price in the Austin area, where city leaders and others are working to address mounting affordability concerns, was $284,000 last year.
“People feel confident that home values are going to stay stable or go up, ” Rude said in an interview after his presentation.