January 2019 Austin Market Report
The first Central Texas Housing Market Report for 2019 is out from the Austin Board of REALTORS® (ABoR). In January, Austin's home price appreciation slowed, and metro area sales remained flat year over year. The median single-family home price increased a mere 1.7% from the previous January. Inventory now sits at a crippling 1.4 months in Austin. The Austin-Round Rock MSA looks much the same, except with a lower price point and a slightly higher inventory.
Kevin Scanlan, president of ABoR, comments, "In December 2018, new listings on the market returned to more normal levels compared to December 2017. This resulted in a slight decrease in January sales this year. However, even though we are seeing slowing home price appreciation, future homeowners are still buying. That means Austin’s market remains extremely competitive and 2019 is highly likely to be another strong year."
Here are basic stats on single-family home sales for January 2019 for the City of Austin and the greater Austin area:
Austin needs to work aggressively to encourage new housing supply at prices affordable for those with median incomes. Without that, it will continue to export affordability and residents out to the suburbs. With unemployment below 3% in the Austin area, the market should also expect some help from rising wages. See this story from KUT.
Vaike O'Grady, Austin regional director of Metrostudy observes that, "In submarkets where there’s lots of growth, the price gap between home resales and new home construction is narrowing. New development is moving further away from the city—to areas where land is less expensive—and most resales are more centrally located. However, in the city of Austin, we’re seeing the opposite trend. Older homes on larger lots are priced higher than new homes on smaller lots. As Austin runs out of space for inventory, developers are getting more creative with home and lot configuration."
We hear about rising interest rates contributing to a cooling real estate market. However, mortgage rates have dropped 0.5% since November and currently sit about where they were this time last year. The Fed has signaled it's now unsure if rate hikes will be needed in 2019. It will take some time for consumers to get the message on the current interest rate outlook.
