Home sales across Central Texas were down in October from the same month last year, new figures show, but the median sales price was up and local real estate agents say the market remains strong despite some cooling.
In its latest monthly report, the Austin Board of Realtors said 2,219 homes were sold in October, 3.1 percent fewer than in October 2015. Half of those homes sold for less than $279,000 and half for more than that amount, for a 9.3 percent rise in the median price.
Those figures cover Travis, Hays, Williamson, Bastrop and Caldwell counties.
“The Austin market is showing signs of slowing down to a more normal pace of activity and appreciation from the incredibly hot pace it has been on for the last few years,” said Jonathan Smoke, chief economist for Realtor.com. However, he said that “the fundamentals for growth — job growth and population growth — continue to be very strong for Austin, and that should ensure continued strong demand.”
In Austin’s city limits, sales were up. After relatively flat growth throughout much of the year, the board said 703 single-family homes changed hands, a 7.5 percent increase over October 2015. The median-sale price for Austin rose 6.5 percent, to $332,250.
“Home sales typically slow down in the fall, so it’s encouraging to see a surge of sales within Austin’s city limits last month,” said Aaron Farmer, president of the Austin Board of Realtors. “Much of this growth is being driven by new home sales in the city, which are up nearly 38 percent year to date. Homes within Austin’s city limits continue to be in strong demand, despite having a significantly higher price point than housing stock in surrounding areas.”
The largest decline in home sales in October occurred in Williamson County, where sales fell 12.2 percent compared to the prior October, the board said. Unprecedented housing demand continues to keep the supply of available homes at record low levels, Farmer said.
Vaike O’Grady, Austin regional director for Metrostudy, which tracks the Central Texas housing market, also said the lack of resale inventory in Williamson County is probably behind the sales drop.
“My sense is that, faced with a dearth of resale opportunities, some buyers are choosing to purchase to-be-built homes,” O’Grady said. “Our builders actually reported a substantial uptick in new home sales in October vs. a year ago.”
She said “an extraordinary number of homes are under construction in Williamson County,” but builders are selling them before the homes are finished or listed for sale. She said many builders don’t submit new homes into the listings database unless they are complete or close to complete.
”Nearly everything that’s going on the ground is being sold,” O’Grady said.
Despite the October sales dip posted for Central Texas, the market “is not slowing to molasses,” said Erin Jones, an agent with JB Goodwin Realtors.
“The market is still moving. There’s still lots of buying and selling going on, and we’re still seeing multiple offers,” Jones said.
Anna Hardeman, broker and co-owner with Noa Levy of The Boutique Real Estate, a luxury residential real estate brokerage in Austin, said the market has cooled slightly in the higher price points above $1 million but remains healthy overall.
She said she’s seeing lots of interest in Avion Park, a 20-unit condominium project on East 38 1/2 Street she and Levy are marketing across from the Mueller neighborhood in Northeast Austin. Avion’s units are priced from $375,000 to $499,000, and four are under contract.
Smoke said two factors are at play in the Austin region’s October sales decline —declining affordability and a low supply of homes for sale.
“The median list price is now $385,000, making Austin 54 percent more expensive than the U.S. and 43 percent more expensive than the median price in Texas,” Smoke said. “It now takes more than 42 percent of the median household income to purchase the median priced home in the market with traditional financing.”
Smoke noted, however, that inventory levels are expected to pick up in the months ahead. Metrostudy is showing housing starts and closings in the region are at their highest level since 2006.
“Single-family starts are now up more than 20 percent on a year-over-year basis and listings of homes for sale are also up 5 percent,” Smoke said. “This should help temper price appreciation. We are already seeing list prices moderate from the level of appreciation earlier in the year.”
Smoke said affordability will continue to be a challenge, especially now that mortgage rates are higher. “But the added inventory and moderating price gains will likely lead to more sales in the months ahead instead of seeing the recent (downward) trend continue,” he said.
Jones said that “even though we feel like it’s a little slower being around the holidays, we’ve had the gas pedal on all summer and I have no doubt that when springs rolls around, the foot will be back on the accelerator.”