The Central Texas housing market kicked off 2018 showing continued strength, with home sales and the region’s median sales price both at record highs for the month of January, the Austin Board of Realtors said Thursday.
January’s year-over-year increases came despite a housing supply crunch in the Austin area, signaling that 2018 could be another strong one for the local market, the Austin Board of Realtors said.
For the seventh year in a row, the Central Texas housing market in 2017 set records for both the number of sales and the median sales price, which rose to $299,900, up 5.4 percent over 2016.
In January, the metro area saw 1,655 home sales, 8.5 percent more than in January 2017, the board said in its latest monthly report. Half the homes sold for $290,000 and half for less, for a 3.6 percent increase in the median price. Both figures were records for a January, the board said.
“In 2018, Central Texas’ housing market will continue to see an increase in both sales and price, despite inventory levels remaining low,” said Jim Gaines, chief economist at the Real Estate Center at Texas A&M University. “The housing demand and lack of inventory is so great, that if supply does not increase, we could see a upwards of 5 percent growth in median home prices within the Austin-Round Rock (metro area). Inventory will be a determining factor in the direction of this year’s market.”
With housing demand outpacing supply for several years running, the median home price in the Austin region has climbed 45 percent over the past five years, housing industry expert Eldon Rude said at an annual housing forecast last month.
The Austin Board of Realtors said the supply of single-family homes in Central Texas remained at 1.9 months, the same as January 2017. That level is well below the supply of six to 6.5 months that experts say is a balanced market, tipped in favor of neither buyers nor sellers.
In response to strong demand, builders have been putting more homes on the ground, even as they scramble to find lots in the areas where people want to live. Last year new home starts rose to the second-highest level ever for a calendar year in Central Texas, with just over 16,000 starts recorded, according to Metrostudy, which tracks the numbers.
In his forecast, Rude, principal of 360º Real Estate Analytics, an Austin-based consulting firm, said he expects builders to start about 17,000 single-family homes this year, which would be an increase of more than 6 percent over 2017.
Despite the region’s price increases and its affordability challenges, people are continuing to buy home, Rude and local real estate agents say.
“The market is brisk on the single family side, often with multiple offers on properties that are priced near the average price for Austin,” said Vanessa Wolfe, an agent with Coldwell Banker United Realtors in Austin. And although the condo market softened some in the fall, “activity has picked up since the first of the year and we are still in a healthy market,” Wolfe said.
In the market overall, housing demand is being driven by the region’s ongoing population and job growth, the latter of which includes a significant amount of expansion by major tech companies, Rude said.
Vaike O’Grady, Austin regional director for Metrostudy, said recently the Austin area could see some softening in its housing market this year due to somewhat slower job growth and anticipated rising mortgage interest rates.
Other highlights in the board’s January report:
In the city of Austin, half of the homes sold for $347,000 and half for less, for a 10.2 percent jump in the median price.
The city’s 482 home sales were a 1.5 percent increase over January 2017’s volume.
Williamson County saw increases in both sales and inventory.
The median price for single-family homes slightly increased by 1.4 percent to $270,215. The 579 sales were 10.3 percent more than in January 2017.
In Leander, the median price was up 1.9 percent, to $290,000. Sales climbed 15.2 percent, with 76 sales.
In Cedar Park, the median price increased by 10.7 percent, to $291,750. Home sales decreased 1.6 percent, to 61 sales.
Hays County showed mixed results. The median price rose by 13 percent year-over-year, to $259,743.
Home sales saw a slightly higher increase — 14.5 percent, with 198 total sales.
The median home price in Kyle rose 8.2 percent, to $224,954, and sales were up 9.3 percent. By contrast, Buda saw significant across-the-board decreases.
The median home-sales price fell 8.2 percent, to $235,825. And sales plunged 57.9 percent, to just eight sales.