Central Texas home sales and median home prices both climbed last month to the highest level of any April on record, the Austin Board of Realtors said Tuesday.
The likelihood that mortgage interest rates will soon creep higher could be prompting some people to buy sooner rather than later in the year, local real estate agents said.
In its latest monthly report, the board said 2,611 home sales closed last month, a 4.1 percent increase over April 2017.
Half of the homes sold for more than $316,000 and half for less, marking a 3.8 percent increase in the median price compared with the previous April.
The board said declining inventory and robust sales trends are creating an increasingly competitive housing market across all price ranges in the Austin-Round Rock metro, which spans a five-county area from Georgetown to San Marcos.
“Price classes across the board are seeing an increase in demand with a decrease in inventory,” said Steve Crorey, president of the Austin Board of Realtors, leading to “an increasingly competitive market for homebuyers.”
Within Austin’s city limits, there were 859 sales, a 7.4 percent increase year-over-year. The median price in the city was $399,000, up 9.3 percent from a year ago April, the board said.
“The desire to live in the city of Austin continues to drive home sales,” said Mark Sprague, a longtime housing market analyst who works for Independence Title in Austin. “Inventory levels for luxury homes priced at $700,000 or higher have decreased year-over-year, and the inventory for homes priced under $500,000 continues to decline in Austin. As a result, we’re seeing locals purchase more homes in the suburbs. However, the real estate landscape continues to be strong compared to most major cities in the country.”
In the Austin-Round Rock metro area, homes priced between $150,000 and $250,000 stayed on the market, on average, fewer than 35 days in April, the board said.
In the city of Austin, single-family homes in that price range spent, on average, between 20 and 33 days on the market in April, indicating a continued inventory shortage amid strong demand, the board said. The Real Estate Center at Texas A&M University cites the affordable threshold for entry-level homebuyers as $200,000 or less.
“If it’s a desirable home or located near a desirable location, especially if it’s in the city of Austin, the time spent on the market can be much lower,” Crorey said.
Eric Meissner, an agent with Realty Austin, said multiple offers “are still prevalent in certain price ranges and certain areas.”
“Anything central that’s reasonably priced is going to go,” Meissner said. “Our economy and job market are strong, and that’s what’s driving growth and that’s what’s keeping our residential real estate market strong.”
In the market overall, Meissner said a potential headwind is the expectation of higher mortgage interest rates.
“People are starting to worry a little bit about interest rates,” Meissner said.
The Federal Reserve raised its key interest rate in March slightly, with more increases expected this year. An increase in the federal funds rate has ripple effects that impact consumer loan rates, including for adjustable-rate mortgages.
Local real estate broker Eric Bramlett with Bramlett Residential said mortgage rates are behind the spikes in pending sales, which were up 14 percent in February and 9 percent in March in the Austin market.
“It looks like we are front loading the year so that we’ll have a great first half and a slow second half,” Bramlett said.