In a year that’s shaping up to be another record-breaker, Central Texas home sales increased more than 2 percent in October and the median sales price climbed more than 4 percent, the latest figures show.
Year to date, sales across the region are up 1.7 percent, putting the region on track for an anticipated seventh straight year of record sales, the Austin Board of Realtors said Tuesday.
“The Austin-Round Rock housing market continues to slightly outperform last year’s home sales activity, keeping 2017 on pace for another record year for home sales,” Brandy Guthrie, the board’s president, said in a written statement.
October saw 2,292 homes change hands in the Austin area, up 2.2 percent from the same month last year, the board said. Half the houses sold for more than $286,742 and half for less, for a 4.3 percent increase in the median price, the board said.
In Austin’s city limits, the median home-sale price increased 9.1 percent, to $360,000. However, volume was down 1.7 percent, with 699 home sales recorded.
“Low housing inventory levels, along with constrained housing development activity throughout the city of Austin, are preventing home sales growth at the city level,” Guthrie noted.
At the county level, home sales increased 1.4 percent in Travis County, 5.4 percent in Williamson County and 6.2 percent in Hays County, according to the board.
Housing inventory levels continued to edge upward in October across the five-county region stretching from Georgetown to San Marcos. However, the market remains tipped in sellers’ favor, with supply still below what’s considered to be a balanced market.
Gains in housing inventory this year have been driven in part by strong housing development throughout much of the region. Metrostudy, which tracks new home construction, said home starts during the 12 months that ended in September are at a 10-year high, with a majority of that construction concentrated in local markets surrounding Austin such as Pflugerville and the west side of Cedar Park and Leander.
“Developers and builders are beginning to experiment with lower-cost, higher-density products between $200,000 and $300,000 in suburban markets, where products like townhomes and smaller single-family homes can be built more easily,” said Vaike O’Grady, Austin regional director for Metrostudy.
John Kovas, a real estate broker with Kovas and Associates Realtors in Austin, said historically low mortgage rates and more moderately priced housing in areas outside of Austin’s city limits prompted many tenants to not renew leases this summer and make the leap to home ownership.
That has left “a significant hole in the rental market, especially in Central and Northwest Austin, where inventory for single family homes and duplexes is up — just drive around and see the increase in signs,” Kovas said.
On the pricing front, the sweet spot in the Austin area market continues to be homes priced between $350,000 to $500,000, in general, “although sweet spots are a little misleading in our city since pricing varies so much between neighborhoods,” said David Pruitt Sr., broker and vice president of sales for Coldwell Banker United Realtors in Austin.
In the higher price ranges, “I do have concerns with the $1 million-plus inventory that is on the market now,” Pruitt said recently. “We are sitting at the highest level in two years of homes in the Multiple Listing Service priced between $1 million and $4 million. Even if no new homes hit the market, we are at an 11.5-month supply of inventory. Inventory of around six months is typically thought of as a healthy market not favoring either buyers or sellers.”
But overall, “our real estate market should continue to remain healthy given that the University of Texas and state government are not moving anytime soon and that as a region, we continue to attract new employers to the area,” Pruitt said. “A more balanced real estate market is welcomed for many, instead of the frenetic pace that some of us experienced over the past few years.”