October was a record-breaking month for the Central Texas housing market, with home sales and home prices seeing significan year-over-year increases.
Home sales climbed 16 percent in October compared with October 2013, while the median sales price and average sales price both increased by 11 percent, the Austin Board of Realtors said Thursday.
October’s 2,403 sales was the highest number on record for an October. Half of the homes sold for more than $240,000 and half for less. The average price was $311,028. All three of those figures are the highest ever recorded for the month of October, the board said.
“It’s always exciting to see a record-breaking month in real estate, but let’s remember that high demand often leads to high prices,” Bill Evans, president of the Austin Board of Realtors, said in a written statement. The latest figures, he said, “underscore the importance of housing affordability as a key issue going into 2015.”
“This month’s results show that it costs a typical homeowner $23,000 more to buy a home than one year ago. For some Austinites, that kind of price increase could mean looking at homes smaller in size, further outside the Austin area, or not being able to afford to buy a home at all,” Evans said.
Leslie Gossett, a broker associate with Austin Portfolio Real Estate, said that although the market has cooled lately, likely due to the usual seasonal tapering, “demand without a doubt is still there.”
In general, demand appears to be strongest for homes priced at less than $700,000, and a “2,000-square-foot home for under $500,000” is difficult to find in many Central Austin neighborhoods, Gossett said.
Eldon Rude, a local housing market expert, said supply-and-demand forces continue to push prices higher.
“Strong local job growth coupled with a low unemployment rate continue to result in robust demand for housing in the region, and with the available active listings still low the result is higher home prices,” said Rude, principal of 360 Real Estate Analytics, a research and consulting firm.
This week, the online real estate site Trulia for the first time ranked Austin among the nation’s metros that are least affordable for middle-income households. Trulia based its ranking on the local median household income for each market.
Trulia said that 40 percent of homes for sale in Austin are within reach of the middle class compared with 50 percent last fall. Miami also debuted on the list with a drop in affordability. Trulia ranked San Francisco as the least affordable metro, with only 15 percent of the homes for sale within reach of middle-class households.
Charles Heimsath, an Austin-based real estate consultant, said that with “constant and growing demand, and little new supply, prices will continue to escalate.”
That continuing trend of rising home prices, he said, “does not bode well for new residents, or those hoping to move from rental housing to home ownership.”
As Austin heads toward a new form of city governance with representation by geographic area, “what is needed is a city government that will take the risk of offending some existing homeowners by allowing some ‘medium’ density owner housing to be built in existing neighborhoods,” Heimsath said. “This would go a long way toward maintaining affordability, and our current quality of life in Austin.”