Central Texas home sales in July 2016 declined year-over-year for the first time in 2016, according to a report released by the Austin Board of REALTORS® (ABOR). While 4,230 homes still sold In Central Texas, that was a decrease of 3.1 percent compared to July 2015. Despite the slight dip in sales, home prices continued their steady increase with the median price of homes hitting $260,000, a 6.1 increase overall.
“When it comes to sales volume, we’ve grown very used to seeing year-over-year increases every single month, but it’s important to remember that 2015 had the strongest summer selling season in the region’s history,” said Aaron Farmer, 2016 President of the Austin Board of REALTORS®. “The value of Central Texas real estate has continued to increase, which is good news for homeowners, but those rising prices could start to have a cooling effect on sales volume in the market amidst growing affordability challenges.”
The housing market overall remained stable with 3.6 months of inventory, unchanged year-over-year. This is significantly below the 6.5 months of inventory that is considered necessary for a stable market, so we are clearly still in a seller’s market even with slower sales. Homes were on the market for 48 hours on average, three days fewer than last summer. Normally an increase in pricing would increase the days on market, but with demand so high for homes in Austin and the surrounding area, buyers are still purchasing homes as quickly as possible.
For the July housing statistics, ABOR took a closer look at each segment of the Austin-Round Rock Metropolitan area housing market to see if any micro-trends emerged. They found that homes priced between $100,000 and $200,000 in July 2016 were virtually non-existent, making it incredibly hard for first-time home buyers to find a home even in the suburbs. Inventory was less than one month, unheard of in an area with so many renters and young families. Homes priced over $400,000 had more than four months of inventory, while luxury homes over $1 million dollars was the only segment that is a true buyer’s market with more than 13 months of inventory.
Farmer continued, “The City of Austin’s high development costs make it virtually impossible for homes under $250,000 to be built within city limits. In return, this pent-up demand is driving home prices up in surrounding areas in where lower-priced housing stock can be built. The result is a catch-22 of housing development, where the homes that can be developed are largely in price classes where both prices and inventory are higher, while the much-needed housing stock under $250,000 goes un-replenished.”
When looking at the statistics for Williamson County, the median price of sold homes rose 6.6 percent year-over-year to $262,000 though home sales decreased 6.5 percent to 1,010 sales. Inventory decreased slightly to 2.4 months with a bulk of available homes for sale being in the higher price ranges. This could signify a slow fall selling season, especially if inventory remains so slow in the lower pricing tiers. Many buyers are searching for affordable housing and are being pushed out to smaller areas such as Manor and Leander to find something within their price range.
It’s possible that this slowdown could be the first sign of a shift in the market or it could be an early settling into the fall selling season. In the fall, home sales tend to slow down and prices dip a little as fewer buyers seek out their next forever home. We have been on a growing high in the housing market for over seven years now, so we’re due for a course correction. That doesn’t mean the market will bottom out like it did during the recession, but we could soon see prices lowering slightly rather than ever increasing.
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Source: ABOR
