Single-family home sales declined across most areas of Central Texas in September, while the median price in the region overall rose more than 5 percent, to $291,464, the latest figures show.
In its monthly report released Tuesday, the Austin Board of Realtors said there were 2,433 home sales in the Austin-Round Rock metro last month, down 4.3 percent from September 2016. Half of the homes sold for more than $291,464 and half for less, for a 5.3 percent increase in the median price over the prior September.
“Despite last month’s dip in home sales activity, it’s important to remember that we’re comparing our current figures to the record-breaking housing market activity in 2016 and it’s not necessarily indicative of a downturn,” Brandy Guthrie, president of the Austin Board of Realtors, said in a written statement.
Home sales declined in most Central Texas counties last month compared with September 2016, with the exception of Williamson County, where volume was up 1 percent. Home sales declined 8.6 percent in Travis County; 0.3 percent in Hays County; and 4.1 percent in the city of Austin.
Home prices, however, continued to rise at a steady pace. Within Austin’s city limits, the median price rose 4 percent, to $355,000.
Although the region’s housing supply is edging up, it still remains a seller’s market, experts say.
“Home builders in Central Texas continue to play catch-up, trying to keep pace with the demand for housing brought on by the surging population in the region in recent years,” said local housing market consultant Eldon Rude, principal of 360 Real Estate Analytics. “The strongest segment of the market remains first-time home buyers, many of whom are eager to purchase a home after tiring of constant rent increases for their apartments.”
Lawrence Yun, chief economist for the National Association of Realtors said the “steady depletion of housing inventory” in the local market “is resulting in a fast rise in home prices and affordability challenges. The construction of single-family homes as well as condominiums needs to ramp up higher in order to fully satisfy housing demand and maintain housing affordability. Otherwise, job growth could stall and bring less dynamism to the local economy.”
Richard Caprioli, a real estate advisor with the Engel & Völkers real estate brokerage in Austin, said that with affordability a “huge concern,” some buyers are turning to condominium living.
“I’ve had a huge amount of interest in my new development listing, SoMa Village,” a gated community of 46 condominiums under construction at 6800 Manchaca Road with prices starting at about $300,000, Caprioli said. “I think this part of South Austin, just south of Ben White (Boulevard), is one of the hottest areas right now. Buyers are smart and well informed, they see the value in new construction pre-sales pricing and are willing to lock in a good price now and wait for completion in the spring.”
Barbara McLaughlin, an agent with JB Goodwin Realtors in Austin, said that after a slow September, the resale market has started picking up in the last two weeks. She said she also is seeing “a lot more traffic” in new-home communities, where some builders are offering buyers discounts of $15,000 to $20,000.
Looking ahead, Rude said he expects Austin’s housing market “to remain healthy well into 2018, although the recent slowing in job growth in the area might begin to dampen demand late next year or in early 2019.”
Yun said that slightly higher mortgage rates next year “will further pressure affordability and therefore attest to even greater need for new home construction to tame home price pressure.”