The May 2019 Central Texas Housing Market Report is out from the Austin Board of REALTORS® (ABoR). The median single-family home sold for a record-breaking $407,400 in the city of Austin. That's a 6% increase from May 2018. However, though Austin housing demand remains strong, extremely tight inventory (1.7 months) contributed to a 3.4% drop in home sales year over year in May. The suburban and broader metro market continues to show strong gains by offering more affordable housing options and a continually improving quality of life.
ABoR president, Kevin P. Scanlan, sums it up: "A lack of middle-market housing in the city of Austin is driving demand to the suburbs. While the Central Texas housing market is healthy and thriving, Austin continues to struggle with housing options that are affordable for first-time homebuyers as the median price surpasses $400,000."
Here are basic stats on single-family home sales for May 2019 for the City of Austin and the greater Austin area:
Major commercial real estate developers and top-tier tech companies continue to place large bets on the continued strength of the Austin and Central Texas economy. The North/Northwest Austin sub-market has benefited greatly from the bulk of this development and corporate expansion. However, Google has 1,100 employees in downtown Austin and recently announced massive expansions there and in East Austin.
A steady or falling mortgage rate environment likely through 2020 should offer some help for the Austin housing market. However, as I said in my March 2019 update, if the City of Austin doesn't get ahead of our housing challenges by reworking it's land use and development code, it's only a matter of time before the market itself "sorts out" the issues in a way unfavorable to many of the major stakeholders. For example, take the Austin Independent School District:
Such escalating prices [in Austin] have taken a toll on the Austin Independent School District, where the city’s lack of affordable housing and the increase in multi-family developments “has negatively impacted the school district's projected growth,” Reyne Telles, the district’s executive director of communications and community engagement, said.
"As more families move outside the district's boundaries, we’re taking the appropriate steps to mitigate this trend,” he said. “In order to adapt to this new reality, and work towards increasing our student population, the school district now allows students who reside outside of AISD's boundaries to transfer into our schools.”