We’ve said it before, and now we need to say it again: The Austin housing market is hot. The numbers from last year are in, and for the fifth year running, Austin broke its record for single-family home sales.
Demand for homes in the Austin area continues to grow and grow. Austin’s ever strengthening and growing job market (Austin ranked 2nd on Forbes’ list of cities with strongest job growth), unique culture, and long list of events and attractions continues to lure more and more people to our city.
However, the Austin housing market continues to strain under the population growth. For the last couple years, the number of homes for sale has not kept pace with the growing demand. Consequently, buyers must compete for houses, home prices keep increasing, and affordability continues to suffer.
More Homes Are Selling
According toe the Austin Board of REALTORS®, 29,068 single-family homes sold in 2015. That’s five percent more than 2014, an all-time record for our city. The fact that Austin keeps breaking records for homes sold reflects the growing demand for housing in Austin. As mentioned earlier, the Austin housing market continues to grow as more and more people move to the city.
Inventory Can’t Keep Up
Yet while demand keeps growing, there aren’t enough homes (either new construction or existing homes) coming on the market. In January 2016, the monthly housing inventory was just 2.0 months. For Austin to have a balanced market (one in which supply kept pace with demand), we would need a 6.5-month supply, according to the Real Estate Center at Texas A&M University.
With so few homes available, Austin is definitely a seller’s market. So if you’re thinking of selling your home, you’re in a strong position. By pricing your home right and properly preparing it, you can create bidding wars that will drive up the price of your home. Homes also spend less time in the market.
Home Prices Keep Increasing
Low inventory keeps pushing up home prices in Austin. In December, the median price for a home in Austin was $270,000, 10 percent higher than December 2014. This is great news for homeowners, as rising prices generate equity. However, rising prices are also hurting affordability in Austin.
Affordability Is Suffering
With home prices continuing to rise, prices are becoming prohibitive to many buyers, especially first-time home buyers. With mortgage rates expected to rise this year as well, affordability will continue to be an issue for the Austin market.
CodeNEXT is one initiative aimed at helping affordability by rewriting the land development code. As Mandy De Mayo, Executive Director of HousingWorks Austin, says, “Rewriting the land development code is incredibly important to overall market affordability and will ensure that Austin can serve a wide range of households with homes marketed at a variety of price points… We haven’t had a new code since the 1980s and if we can get it right this time, the end result will be a variety of housing options for all income levels.”
Thinking of Buying?
In the immediate future, however, it’ll take patience and due diligence to get the home you want in Austin. That means being pre-approved for financing and being prepared to act on a home the same day you tour the property. Contact us for help to get your next home in this competitive market.