Last year was another record-breaker for Central Texas’ housing market, the newest numbers show. And some local real estate agents and housing market experts predict 2018 will look a lot like 2017, with the market staying strong yet concerns about affordability lingering as prices continue their anticipated climb.
The Austin Board of Realtors said Thursday that both sales and the median home-sales price in the region hit all-time annual highs in 2017, the seventh year in a row that the previous year’s numbers were topped.
The board said home sales rose about 2.4 percent to a record 30,059 sales in the Austin-Round Rock metro area, which spans five counties stretching from Georgetown to San Marcos.
Half of the homes sold for more than $299,900 and half sold for less, a 5.4 percent increase in the median price over 2016.
“While the Austin area continues to break records, the pace at which annual home sales and prices are increasing in Central Texas is beginning to normalize, indicating a more stable market,” Steve Crorey, president of Austin Board of Realtors, said in a written statement. At the same time, he noted that “affordability in Austin and the surrounding areas remains a concern for potential buyers.”
State and national events such as flooding from Hurricane Harvey and the overhaul of the U.S. tax plan didn’t impact the housing market locally. Even rising home prices — mainly due to housing demand exceeding supply, market experts say — didn’t stop the market from growing in 2017.
The year closed with 2,653 sales in the Austin region in December, up 12.6 percent over December 2016. December’s median price was $310,000, up 7 percent from the prior December.
“Our single-family market continues to be fueled by strong job growth and the corresponding migration of workers to the Austin area,” said real estate consultant Charles Heimsath, president of Austin-based Capitol Market Research. “And now, the recent increase in home mortgage rates is motivating ‘fence sitters’ to make the move to buy before interest rates increase again. The lack of inventory, particularly at the low end of the market, will continue to push sales prices higher and support a (continued) sellers’ market.”
Isabel Affinito, an agent with JB Goodwin Realtors in Austin, said buyers “will need to be ready to pay dearly to be in central Austin neighborhoods. But those areas are so attractive, I don’t think it will stop buyers from buying.”
“I certainly know sellers who are leaving town, but more often than not it’s because they have to for work, not because they want to,” Affinito said. “The general consensus is, ‘Austin is a great city. We plan to stay.’”
Todd Grossman, an agent with Realty Austin, said the local market “has seen a vast increase in appreciation since the mortgage crisis of 2007- 2008.”
In the city of Austin last year, the median sales price rose to $362,000 — an all-time high.
“It is no hidden fact that some of the consumers are starting to feel the pressure of being able to get into the Austin real estate market,” Grossman said. “The luxury home market may have a soft year in 2018 due to price points in Austin. One million dollars doesn’t buy you what it once did, therefore buyers moving to Austin may be priced out of the luxury segment.”
While the number of houses available in Austin declined, inventory gradually increased in the suburbs. Home sales indicate families continue to move to surrounding areas, seeking more affordable housing options, the board said.
In Williamson County, Leander had the greatest growth with a 7.4 percent increase in sales, followed by Cedar Park (4.5 percent) and Round Rock (3.7 percent).
While the median home price in Williamson County increased to $275,000, it still remains significantly lower than prices in Austin, the board said.
In Hays County, sales increased by 4.8 percent last year. The median home-sales price in Hays County rose to $259,000, and inventory levels grew during the year, the board said.
Cord Shiflet, an agent with Moreland Properties in Austin, said 2017 w”as a great market for homes” in the Austin area, and he doesn’t see anything changing for 2018, barring any turmoil with the stock market or unexpected world events.
“The recent tax law change that passed in December of 2017 has been very positive for Texas,” Shiflet said. “We’ve seen a sudden influx of very high earners from states like California and New York who are seeing residency in a state that doesn’t have a state income tax. Texas is always high on those people’s list and when you can live anywhere you want within Texas, Austin is always a buyer’s top choice. I expect we will see another banner year.”
Median price for single-family homes in the Austin metro area.
Source: Austin Board of Realtors