Austin area on pace to set home sales record


Central Texas is on track for a record year for home sales, the Austin Board of Realtors said Thursday.

In its latest monthly report, the board said 2,378 single-family homes were sold changed hands in October, a 2.5 percent increase over October 2014’s volume. The median sales price was $252,790. That’s a 5.3 percent increase over the prior October, when half the homes sold for $239,990 and half for less.

The Austin area set a record last year with 27,794 homes sold across the region, the board’s figures show.

“We’re on pace for another record year,” said Barb Cooper, president of the Austin Board of Realtors. “While home sales typically slow each fall, housing demand has remained strong far past the typical peak selling season. This demand stems from strong employment and our area’s high growth rate—factors that help create a stable housing market.”

Year to date, Central Texas has had 24,884 home sales from January through October, the board said. Pending sales are up 4 percent, with 2,339 homes in the pipeline to close.

So far, sales have risen every month in 2015 year-over-year, except for May, the board’s figures show.

Demand has been outpacing supply for what has now been the longest prolonged period since the 1980s, said Eldon Rude, a longtime Central Texas housing market analyst.

And that imbalance, Rude said, “is directly related to an extended period of sustained job growth and people moving here. That’s at the heart of why we continue to see record home sales.”

Rude pointed out the Austin area has gained more than 20,000 jobs a year, for more than five years now.

“It’s a long period of strong economic growth that has resulted in a lot of people moving here and needing housing,” said Rude, principal of 360 Real Estate Analytics, an Austin consulting firm. “If we continue to have a strong economy, the housing market is going to remain strong.”

Shelly Hemingson, a Realtor with Keller Williams, has seen the boom first hand. Even with a slight slowdown in the fall and a small rise in interest rates, “houses that are priced competitively, especially those $350,000 and under, are going really fast,” she said. “We’re still seeing multiple offers, and a lot of my deals are cash deals, with buyers moving into Austin who are New Yorkers, Californians and international.”

That’s particularly the case in Central Austin, where buyers are willing to sacrifice space and pay more for a convenient location, Hemingson said.

“Fixer-uppers that are a little smaller are very much in demand,” she said. “I always encourage my buyers to get pre-approval from a lender because I can guarantee you there is going to be a multiple offer situation.”

Kristin and Steve Hamlett recently saw how fast the market can move. They put their house, in the Ridgelea neighborhood in Central Austin, up for sale on Oct. 1 in preparation for a move to the Mueller development.

“Six days after listing it, it was under contract for a little above the asking price,” Kristin Hamlett said. “We were surprised by how fast it happened.”

Strong housing demand coupled with a low supply of homes continues to push prices higher. Year-to-date, the Austin area’s median home sales price rose 9 percent, to $262,000, the board said.

Nick Zappitelli said he bought a starter home in 2008 in South Austin, paying close to $90,000. He sold it this year for roughly twice that amount, he said.

“The market has just exploded,” Zappitelli said. “It’s unreal.”

Zappitelli, director of public relations for International Studies Abroad, moved from Austin to Lexington, Ky., in 2012. This summer, he and his fiancée, Megan White, moved back to Austin, purchasing a house in the Rosedale neighborhood that they were able to buy for less than the asking price.

Zappitelli credits his real estate agent, David Brodsky, for helping the couple negotiate a lower price.

Brodsky, a broker associate with Keller Williams Realty, said the Austin housing market is expected to remain strong into the foreseeable future, despite the prospect of a bump in mortgage interest rates when the Federal Reserve meets in December.

“While I think it’s inevitable that rates are going to rise, I don’t think it’s going to skunk a very robust Austin market,” Brodsky said.

Rude said the impact on the housing market from rising rates “will be tied to how much they go up, and how quickly.”

In addition to job and population growth, another reason behind the strength of the market for pre-owned houses is that new home prices are sharply rising due to increasing cost of land, lots and labor, Rude said.

“The resale market is very compelling in terms of pricing,” Rude said. “It’s a viable alternative because new homes have gotten so expensive.”

Nationally, the housing market has had its best year since the recession. And sales of existing homes are expected to increase in 2016 at a moderate pace, although affordability pressures from inventory shortages and rising mortgage rates could slow the potential for even stronger sales momentum, Lawrence Yun, chief economist for the National Association of Realtors, said at a recent forecast event.


Reader Comments ...


Next Up in Business

Top Local Business Stories of the Week

MILITARY TECH General says new tech center in Austin will keep U.S. Army relevant: The U.S. Army’s new technology center in Austin, named its Futures Command, is necessary for the military branch to remain “the best army in the world,” Army Lt. Gen. Eric Wesley said this past week. Wesley, who was in Austin with a team of Army officials...
Austin-area apartment rents hit record high
Austin-area apartment rents hit record high

For a couple of years, apartment dwellers in the Austin-area got a bit of a break from sharply rising rents amid a surge of new supply and somewhat slower job growth. But the respite is proving to be short-lived, experts say. Job growth has gained momentum, leasing has picked up steam and the Central Texas apartment market is once again on the rise...
Area jobless rate at 3.2% amid hot economy; average wages slow to rise
Area jobless rate at 3.2% amid hot economy; average wages slow to rise

A trend of near 20-year lows in the Austin metro area’s monthly unemployment rate continued in June, although by some measures the tight labor market has yet to fuel gains in average wages for workers. The local jobless rate registered 3.2 percent last month, according to the Texas Workforce Commission, the lowest nonseasonally adjusted rate...
Man fired after encounter with 'racist' customer. After sharing story, Home Depot offers job back.
Man fired after encounter with 'racist' customer. After sharing story, Home Depot offers job back.

After a man last Thursday approached the checkout at a Home Depot in Albany, New York, staff member Maurice Rucker asked him to leash his dog. That's when the man exploded. » RELATED: Atlanta's Home Depot growing in various ways, but not new stores Rucker, a 60-year-old black man, claimed he was fired Tuesday after defending himself from...
Colton House luxury hotel planned for South Congress Avenue
Colton House luxury hotel planned for South Congress Avenue

Austin’s hotel boom shows no signs of letting up. The latest example: Developers have started work on an 80-room luxury hotel in South Austin. The Colton House is going up at 2510 S. Congress Ave., near West Oltorf Street. The site had previously been occupied by the Taste of China Express restaurant. It’s set to debut in fall 2019. Inherit...
More Stories