Stats released by the Austin Board of Realtors this week continue to tell the story of Austin’s limited inventory coupled with increasing sales prices throughout the Austin-Round Rock market area. In the city of Austin proper, sales volume increased by 1.2% year over year (stifled only by limited houses to buy), while median sales price jumped 12.6%.
Inventory of affordable homes remains a top challenge in city of Austin’s market, with many first time homebuyers, backed by strong jobs, are being met with tough competition in their efforts to break into the world of home ownership without breaking the bank. First time home buyers under $400,000 wanting to stay “close to downtown” face the toughest competition and lowest inventory. To site an example, last month, this house in Crestview purportedly received more than 25 offers in 3 days.
Last week, the city of Austin released its initial maps for “CodeNEXT”… the city’s collaborative effort to rewrite our city’s Land Development Code — which in theory — will help increase affordable housing options in Austin and help to achieve the city’s 10-year housing plan of 135,000 new units “within the corridors and centers,” without “damaging the character” of traditional neighborhoods by forcing additional density into traditional, single-family neighborhoods. During a press conference April 18th, upon releasing the new CodeNEXT maps, Mayor Adler declared “Austin Everybody Chill Out Day,” repeating his exhortation: “The CodeNEXT process will help us manage our explosive growth while preserving what makes Austin special. We have to act and need to begin now – and this map is where we start.”
ABOR’s press release this past week also sited its concerns for “a growing disparity in market conditions among housing price classes” and underscored the need for city policies that create additional housing capacity to meet the market demand and a broader range of housing types throughout the region. Brandy Guthrie, ABOR 2017 President, commented on the disparities calling for urgent and immediate need to fill the “missing middle” in the city’s housing stock.
An analysis of March 2017 housing market data by price class revealed disparities in sales activity, time spent on the market and inventory of single-family homes throughout the region. Price class breakdowns of single-family home sales revealed annual declines in the sales volume and availability of lower-priced homes and corresponding gains in the sales volume and inventory of higher-priced homes.
|City of Austin Single-Family Home Sales by Price Class: March 2017|
|Price Class||Sales Volume||Change from March 2016|
|$0 – $69,999||0||0.0%|
|$70,000 – $99,999||0||-100.0%|
|$100,000 – $149,999||2||-90.9%|
|$150,000 – $199,999||28||-56.7%|
|$200,000 – $249,999||88||-16.5%|
|$250,000 – $299,999||117||-22.3%|
|$300,000 – $399,999||211||13.4%|
|$400,000 – $499,999||119||15.8%|
|$500,000 – $749,999||141||2.4%|
|$750,000 – $999,999||46||20.0%|
The monthly housing inventory for single-family homes priced $250,000 or less in the city of Austin was less than half a month in March 2017, or essentially nonexistent. Single-family homes priced between $150,000 and $250,000 spent less than one month on the market in March 2017. During the same time frame, Austin single-family homes priced $500,000 and higher spent more than 60 days on the market and posted significantly higher inventory levels.
Dr. Jim Gaines, Chief Economist for The Real Estate Center at Texas A&M University, agreed: “As population grows and residents seek to live in closer proximity to key activities, demand is created for greater density. Without more housing, homebuyers and developers are forced to look outward; but there are often many ways that existing residential neighborhoods can be zoned to allow for greater infill. Central Texas, especially Austin, is rapidly approaching a critical mass of population growth when city leaders may be forced to create imaginative, higher-density options to accommodate popular demand.”
Still a Bright Star: In spite of our affordability and inventory challenges, Austin was still named the top “Market to Watch” for 2017 in a study by Emerging Trends in Real Estate., the outlook for real estate in Austin remains strong with projections for continued property value appreciation.