In the course of my day to day to activities, I oftentimes get asked about the appreciation rate in the Austin market, and my thoughts on the future of the Austin housing market. When responding to these inquiries, it’s important that I explain the different methodologies in calculating the appreciation rate. When you analyze the appreciation rate of anything you are simply comparing the current value to a previous value and reporting the percentage in change. However, the observations derived from these figures can vary drastically by what metrics you are using.
If you look at the appreciation rate based on the average sales price, your results will be skewed by high and low outliers. For this reason, I prefer to use the median sales price when assessing the appreciation rate for Austin area homes. However, simply utilizing the median sales price has its own flaws. What if the homes sold in 2020 were all much larger than the homes sold in 2019? Your results would be skewed. Thus, when looking at the appreciation rate, I prefer to compare the median price per square foot. Even using this metric, results can still be unreliable. If there were far fewer sales in one year than the other, the appreciation rate derived may not reflect the true nature of the market.
That being said, everyone wants to know what the appreciation rate is for homes in the greater Austin area. I myself was curious after looking over the year over year growth for Austin homes from July 2019 to July 2020. I knew that by only comparing these two months of data, the statistics were not illustrating the true picture for certain neighborhoods. Thus, I got to work and combed through the data to try to form a more clear picture.
Before I illustrate my findings, I would like to point out a few factors in regards to the data utilized. All of the information I pulled was from the Austin Board of Realtors MLS. I limited my search to the most central Austin area zip codes, and I analyzed sales data for all single family homes. This included new and existing condo, townhome, and traditional home sales. I compared the sales thus far in 2020 with all sales in 2019. Inherently, there are some flaws to this approach as there is a complete year of data for 2019 and only partial data for 2020. That being said, here is what I found.
If you look at the median sales price per square foot, the 78701 zip code had the highest appreciation rate among central Austin zip codes. 78701 had an appreciation rate of 13.84% with the median sales price per square foot in 2020 at $658. This data was pulled from approximately 160 sales in 2020 compared to around 300 sales in 2019. It will be interesting to review these stats once a full year of data for 2020 is available. However, this downtown zip code has a strong track record of appreciation with an increase of about 10% for the median sales price per square foot between 2018 to 2019.
The 78742 zip code showed the lowest level of appreciation in the Austin area. In fact, it was the only zip code I analyzed that actually depreciated between 2019 to 2020. In 2020, the median sales price per square foot was $228 compared to $248 in 2019. However, there were only two sales in 2020 and five in 2019, and thus this data set is too small to draw meaningful conclusions.
Although, I think the results are less significant, I also analyzed the appreciation rate among the same Austin area zip codes based on the median sales price. Based on this methodology, the zip code in Austin with the highest appreciation rate between 2019 to 2020 is 78746. Homes in 78746 appreciated 19.76% between 2019 to 2020. This data was pulled from 426 sales in 2019 and 232 sales in 2020. The 78742 zip code similarly showed the lowest level of depreciation when analyzing the change based on the median sales price; however, as previously mentioned, the limited number of total sales in this zip code obscures the validity of this figure.
All in all, it is important to assess appreciation rates in the Austin real estate market. When you own a home and its value appreciates over time, you make money when you sell! And, when you leverage your home purchase with a mortgage, that appreciation benefit is compounded based on the fact that you’re profiting off the appreciation value of the entire home, when only paying a portion of the home’s value in your down payment. For example, if you bought a home for $300,000 and put 20% down ($60,000) and that home appreciated 10% you would make a $30,000 gain on a $60,000 investment. It’s a bit more complicated when you throw mortgage payments into the mix, but you can easily see why understanding a given area’s appreciation rate is important. That being said, make sure to take a comprehensive look at the data and recognize its potential limitations when evaluating a market based on the appreciation rate.
If you have questions about the appreciation rate in your Austin neighborhood, contact me today. I’d be happy to do the research and provide you with the data you need to make an informed decision.
After a lull in real estate sales during the typically peak spring selling season, the Austin real estate market is showing a rebound in full force this summer.
In the City of Austin, the median sales price rose to $423,000; this figure is up 11% compared to last July. The total number of home sales within the city limits also increased 21% from July 2019. There were 1,470 closed residential home sales in the City of Austin last month. Inventory remains critically low, and we are seeing homes spend less time on the market too. Within the city limits, homes spent an average of 29 days on the market in July.
Within the greater Austin area, we saw similar trends. The median sales price for single family homes in the Austin-Round Rock MSA increased 10% from July of 2019, and the number of total homes sales for July increased at the same year over year rate as within the city limits, 21%. Homes in the greater Austin area spent a little more time on the market last month compared to homes within the city limits. The average days on market within the Austin-Round Rock MSA was 44 days last month - still 3 days less than July of 2019.
Unprecedentedly low interest rates are fueling buyer demand, and despite Covid-19 concerns the Austin economy is still managing to create new jobs that spur an influx of new residents. Combined these factors resulted in the second strong month of consecutive home sales within the greater Austin area. Now, the real question is do we have enough housing supply to keep up with buyer demand?
Want to know what’s happening in your hyper-local Austin market? Contact me today and I’ll give you the run down!
In a previous post, I discussed how the effects of the coronavirus on the Austin housing market are still uncertain. Since, writing that post, many things have changed. A shelter in place order has been put into effect for the City of Austin, Travis County, Williamson County, and Hays County. Each of these ordinances varies slightly, and while real estate services are included as an essential professional service, the extent to which a REALTOR can perform his or her job duties is limited by these orders. The City of Austin ordinance as well as the Travis County order explicitly prohibit the showing of homes during the coronavirus shelter in place.
While other counties do not necessarily prohibit showing homes, the spirit of all orders is to allow real estate services that are truly essential. Assisting in the successful completion of closings for homes that are already under contract, providing critical property management services, and housing unhoused individuals is permitted while maintaining social distancing protocols. That being said, these orders severely limit the amount of real estate activity that can legally take place.
On March 20th, I took note of the recent market activity for residential homes in the greater Austin area. All stats that follow are based on statistics for all single family homes in the Austin MLS. This includes homes, condos, and townhomes. From 3/19/2020 to 3/20/2020, there were 287 new home listings. One week later, the number of new listings dropped by 114. The number of pending home sales similarly decreased but not nearly as dramatically. On Friday, March 20th, there were 136 pending home sales. In comparison, we saw 18 pending home sales on Friday the 27th of March. Additionally, home sales decreased from 145 on the 20th to 108 on the 27th.
The number of homes leaving the MLS is also indicative of the effect of Covid-19 on the Austin real estate market. Between March 19th and March 20th, 16 homes were withdrawn from the Austin MLS. That number rose to 23 between 3/26/2020 and 3/27/2020. Real estate agents also have the availability to change the MLS status of homes to temporarily off market. On Friday the 20th, 35 homes were changed to this temporary status. Yesterday, March 27th, there were 47 homes that went to temporarily off market status. These numbers are more substantial when looked at from a greater duration of time. In the 3 days prior to 3/20/20, 91 homes went to temporarily off market status. In comparison, 196 homes were temporarily taken off the market between March 25th and March 27th.
In short, Covid-19 and the resulting shelter in place orders are affecting the Austin real estate market. If you can’t physically show homes, there will be far fewer home sales. In my personal business, I am seeing these effects first hand. Clients who planned to list their homes and buy new ones are holding off until after the coronavirus pandemic. My new construction deals are continuing; however, the implications of the shelter in place orders will very likely slow construction on many homes. As always, if you have specific questions feel free to contact me.
As is the case with almost every aspect of our lives, there is a lot of uncertainty around how the coronavirus will affect the local housing market. Over the past few years, the Austin housing market has been increasingly competitive with the average home sales price rising year over year. Will Covid-19 slow sales or will buyers jump to take advantage of historically low interest rates?
The Impact of Covid-19 on Austin Home Buyers
The coronavirus has began to change our daily lives. Many are practicing social distancing, self-quarantining, and generally spending less time outside of the home. Going into someone else’s home is just one more opportunity to come in contact with germs, and surely there are quite a few buyers foregoing showings at the present moment. According to a survey performed by the National Association of REALTORs last week, only 16% of real estate agents said the coronavirus has affected buyer interest. However, I would have said the same thing last Monday when surveyed. It wasn’t until last Tuesday, that I heard from my first buyer client that they would be holding off on their home search until the Covid-19 scare blows over.
Will the Coronavirus Reduce the Number of Homes on the Market?
Sellers may also have fears about letting strangers into their homes. In Austin, we have had incredibly low inventory for far too long. There are simply not enough homes for sale to accommodate the ever growing buyer interest. Will sellers decide not to list their home due to fears of contamination? It’s quite probable, and this will only exacerbate the low inventory issue. Builders too are seeing the affects of the coronavirus. Nearly 1/3 of our raw building materials come from China, and this doesn’t even account for assembled goods such as appliances and fixtures. First hand, I’ve already witnessed supply chain issues, with new home buyer clients unable to get tile they had originally ordered since it was produced in China. If builders are delayed due to material delays, and sellers are reluctant to list, it won’t matter that interest rates are at historically low levels. Buyers won’t have any homes to buy.
How Will the Corona Virus Impact the Seasonality of the Austin Real Estate Market
We are just entering what is typically the spring selling season in the Austin area. Usually, this is when the largest percentage of sellers list their home, and the majority of buyers purchase. Home sale prices are usually the highest in the coming months as buyers compete with one another to move while school is out of session. However, it’s unknown how the coronavirus will affect the seasonality of the Austin market. Will it delay the spring selling season? Will it have no affect at all? Or, will it cause a mass recession leaving buyers unmotivated to make moves. After all, what good is an incredibly low interest rate if you are not sure you will have a job next month.
What Can We Learn From the Past?
In the past, Austin has been largely spared from housing market collapses. In 2009, the median sales price dropped from $192,000 in 2008 to $190,000. It increased to $195,000 in 2010 and stayed the same for 2011. Since then, the median sales price has been steadily increasing. We wrapped up 2019 with a median sales prices of $315,000 for the greater Austin area. While the median sales price changes from 2008-2011 were not too significant, the number of sales dropped significantly beginning in 2007. Between 2007 to 2008, the number of home sales in the greater Austin area dropped by about five thousand, and the number of home sales continued to slowly decline each year until 2011. In 2009, the Austin real estate market saw its lowest number of annual sales with only 18,632 sales occurring. In comparison, 35,437 homes sold in the greater Austin area last year.
It’s not unrealistic to think that the coronavirus may slow Austin area home sales yet again. Furthermore, if there is one area that may be more affected than others, I suspect it will be the luxury home market. After the housing market crash, we saw these types of homes suffer the most.
Overall, it’s still too early to say how the coronavirus will affect the Austin market. If you have questions about how it may affect your specific real estate goals, give me a call. I’m happy to share my opinions with you.
The temperature is not the only thing heating up in Austin this time of year; the central Texas real estate market is HOT, HOT, HOT! Last week, the Austin Board of REALTORS released the July 2019 home sales report; it revealed that the median sales price increased year over year for single family homes located within the city limits and those in the greater Austin area. Additionally, Austin area home sales set an all time high for any July on record with total sales topping out at 3,439 for the entire greater Austin area.
Within the greater Austin area, the median sales price for single family homes increased 3% from last year to $325,000. Simultaneously, the sales dollar volume increased 15.4% to $1,407,009,110.
Within the city limits, a shortage of supply is keeping the total number of homes sold lower. Last month, 943 homes sold in the city limits down just slightly from 952 homes sold in July of 2018. Additionally, those homes that are on the market are staying there for less time. The average days on market for homes in the city limits dropped to 29 days last month. Within the city limits, the median sales price increased 3% year over year to $410,000.
However, this figure is still lower than the median sales price for homes that sold within the city limits last month. In June, the median sales price of single family homes within the city of Austin was $420,000. This is not surprising, as historically you tend to see highest sales prices in the Austin area throughout the spring and early summer months.
All in all these stats show that the Austin market is still going strong. As long as there are homes to buy, people will keep buying them, and they are willing to pay a premium in order to do so!
Recently, I was showing a client of mine some condos in central Austin. She was trying to decide between a condo in Clarksville and a condo in 78704, and she asked which area appreciated better. From the seat of my pants, I speculated that 78704 condos have appreciated more than Clarksville condos. This hypothesis was based on the fact that Clarksville condos have been pricier for some time, so it seemed logical that the 78704 condos would have appreciated more in the past ten years or so.
When I got home, I ran some numbers. I looked at the median sales price annually from 2009-2019 for condos in the following central Austin zip codes: 78701, 78702, 78703, 78704, 78705, and 78751. I then calculated the appreciation rate for condos in each zip code between 2009-2018. The median sales price for 2019 would not have provided accurate data since we are only a few months in to 2019.
As I suspected, condos in 78704 appreciated more than condos in Clarksville (78703). In fact, condos in 78704 had the highest appreciation rate out of all of the central Austin zip codes. In 2008, the median sales price for condos in Austin’s 78704 zip code was just over $169k. In 2018, that number shot up to $376K. In 78704, we are seeing a lot of condo regimes. A condo regime happens when a developer takes a traditional single family lot and constructs two new units on the lot. Often times these units are not attached and live like single family homes. However, they are technically condos and sell for much more than a traditional condo. Thus, I am not surprised by this appreciation rate.
In 78703, which consists of Tarrytown, Clarksville, and Old West Austin the median sales price for condos in 2009 was a little over $347K, compared to $460K in 2018. Out of all the central Austin zip codes I looked at, 78703 had the lowest condo appreciation rate at just over 32%.
As would be expected, condos in East Austin appreciated well over the last 9 years. In 78702, the median sales price for condos in 2009 was about $168K. Last year, that figure jumped to 325K.
Condos in downtown Austin appreciated about 78% between 2009-2018. In comparison, condos in 78705, which encompasses the UT campus area, appreciated about 57%.
Overall, condos in central Austin have appreciated well. If you talk to anyone who purchased a condo about 10 years ago, they will usually tell you one of two things, “I wish I bought more” or “I wish I hadn’t sold 5 years ago, even though I thought I was making a killing when I sold.”
If you are considering buying a condo in central Austin or are curious how much your condo is worth, contact me today.
On the national scale, there are rumblings of a market shift in the real estate market. However, at the local level, real estate sales remain strong. According to Steve Crorey, President of the Austin Board of REALTORS, "Sales are up 3.3 percent year-to-date for 2018”. The Austin-Round Rock MSA experienced growth in both the number of homes sold and the median sales price while the City of Austin revealed fewer sales, but a higher median price. As prices within the city limits continue to increase, buyers are moving farther out in search of an affordable home.
In the Austin-Round Rock MSA, the sales volume increased slightly to 2,201 sales last month while the median home price increased to $301,391. As would be expected, there was an increase in all stages of listings year over year: new listings (+1.7%), active listings (+11.5%) and pending sales (+2.5%).
Within the City of Austin, median sales price rose 5% to $374,900. At the same time, November home sales in the City of Austin decreased from 653 sales in November 2017 to 618 sales in November 2018. The total sales dollar volume for the City of Austin remained the same at $288,251,771.
In my opinion, the strength of the Austin real estate market is directly correlated to the health of the Austin job market. The local unemployment rate is extremely low, 2.6%, and major businesses continue to move here or expand operations in Austin such as Apple announced this week.
Furthermore, Austin will also always be home to both the University of Texas and government employers. There are over 50,000 students enrolled in undergrad or graduate programs at UT, and the vast majority of these students stick around and call Austin home. With Austin being the state capitol of Texas, it is also home to a number of other government agencies such as the Texas Comptroller of Public Accounts; Texas Department of Transportation; Texas Department of Public Safety; Texas Water Development Board, and the Texas Department of Health. The bottom line is that Austin has a healthy local economy with a variety of high tech businesses built upon a backbone of government and education. As long as there are jobs, the real estate market will stay strong.
If you’re interested in moving to Austin, contact me today for more information about how you can call this wonderful city home.
The Austin Board of REALTORS® just released the September 2018 Austin Market Report. According to the report, September data shows a stall in home sales growth. Regardless, median home sales prices continue to rise for both the City of Austin and the Greater Austin area.
The home sales volume stall that the board report magnifies as its report title is quite slight. Compared to September 2017, there were 22 fewer single family home sales in the Austin – Round Rock MSA this past month. Within the City of Austin, home sales decreased from 708 last year to 702 home sales in September of 2018. This is hardly a drastic change in the market. According to Lawrence Yun, chief economist and senior vice president of research at the National Association of REALTORS®, the flat sales growth in the Austin area could be due to rising interest rates. This is a valid argument; interest rates have rose about three quarters of a percent since last year. However, there are many other factors that could be at play here, such as the lack of housing available and the increasing rise in the median sales price.
In the greater Austin Area, the median home sales price increased to $302,250 last month. This is almost eleven grand more than the median home sales price of September 2017. Within the city limits, the median sales home price increased to $365,000. The combination of increased prices and higher interest rates leads to less purchasing power for home buyers.
The average days on market (ADOM) for homes in the greater Austin area and homes within the city limits has not changed much since last year. Homes within the City of Austin spent a few less days on the market this year compared to last year. This month, City of Austin homes had an ADOM of 38 compared to 42 days last September. In the greater Austin Area, the ADOM was 53 days. The exact same figure as September of 2017.
If you’re interested in learning more about the exact market conditions in your neighborhood, contact me today. I’d be happy to prepare a specified report for your area.
The most recent market report for Austin area home sales was just released by the Austin Board of Realtors. May’s market report showed continuing trends of rising prices, low supply and strong demand in the Austin market. The median price for homes within the city limits rose to the greatest price ever of $389,000. Outside the city limits, prices continue to rise as well. In the greater Austin area, the median sales price increases 5% year over year to $325,000 last month.
Rising home prices in the greater Austin area continues to make it challenging for many first-time home buyers to purchase a residence in the Austin area. Home prices are increasing at a rate far greater than median family income. Data from the Department of Housing and Urban Development (HUD) shows the Austin-Round Rock median family income increased 17.5 percent from 2013-2018. Over the same time frame, median home prices in the Austin-Round Rock MSA increased 42.5 percent.
With the steady demand for Austin housing, builders struggle to keep up with the steady influx of buyers. Antiquated building restrictions, and an inundated city staff further delay the creation of more housing. As we have seen in past months, buyers are flocking to the suburbs in search of more affordable housing options. In order to encourage the growth of affordable housing within the city limits, there must be changes made to the city’s land code. Conflicts over the City of Austin’s CodeNEXT plan are further delaying the ability for developers and builders to take action towards the City of Austin’s housing crisis.
If you’re interested in learning more about what’s happening in your specific local market, contact me today. I’d be happy to provide a detailed market report for your specific zip code.
The Austin Real Estate Market is not showing any signs of slowing down. Yesterday, the Austin Board of REALTORS released the March 2018 market reports for the Austin Area. Across the board, we are seeing median price increases and an increase in the volume of single-family residential sales. With new listings going under contract quite quickly, we are also seeing an increase in the number of pending sales.
In the greater Austin area which encompasses Austin and suburbs such as Round Rock, Georgetown, Cedar Park, Kyle, Buda, and Manor, known as the Austin-Round Rock MSA, the median sales price reached $305,233 last month. That figure is up 4% compared to March 2017’s Austin area median sales price. Even more remarkably, this area saw a total of 2,714 single family sales last month; this is more sales than any previous March.
Within the Austin-Round Rock MSA, the average days on market (ADOM) increased slightly from last year. Homes stayed on the market approximately 3 days longer with an ADOM of 61 days last month. Homes prices under $250K in the greater Austin area averaged far fewer days on market.
In the City of Austin, single family homes spent on average 46 days on market last month. This is about 5 days less than the ADOM in March of 2017. The median sales price within the City of Austin increased only slightly compared to the median sales price of last March. Last month, the median sales price for single family homes in the Austin city limits was $370K.
Inventory continues to be a problem across the board as well. A balanced market consists of 6.5 months of available homes. Within the City of Austin, there is about 1.5 months of inventory; the greater Austin area has about 2.2 months. As buyers continue to seek out more affordable areas to live, suburbs like Buda are facing a shortage in supply. Last month, there was 1.9 months of inventory in Buda. In comparison, in March of 2017, Buda had 2.4 months of inventory. As inventory decreases, buyers are moving farther out to suburbs like Kyle in order to find homes.
If you are interested in learning more about the market conditions in your Austin neighborhood, contact me today. I’d be happy to give you a detailed breakdown of the activity happening in your hood.
Erika Rae Albert
Sharing my Austin real estate updates, home owner tips, & more.