May 2020 Austin Market Report
The Austin area market in May 2020 felt the full force of the previous month’s shelter-in-place order and accompanying shutdown of much of the local, state, and national economies. According to the Austin Board of REALTORS (ABoR), this led to a 36% decrease in closed sales and a 18% decrease in new listings in the City of Austin last month. However, Austin's median residential sales price rose by 10% to $424,050 compared to May 2019. Suburbs and outlying communities were flat year over year at $329,893. However, the pandemic a led to a 29% decrease in sales and a 15% decrease in new listings. Inventory in Austin was down slightly compared to this time last year at 1.7 months (balanced market is ~6 months).
So, despite the pandemic and shelter-in-place orders, May 2020 continued the familiar overall pattern in Austin of low inventory, high buyer demand, and rising home prices.
Romeo Manzanilla, 2020 ABoR president, commented, “We recognize there’s still an element of discomfort with listing one’s home during the pandemic and Austin REALTORS® are taking every precaution to ensure safe and efficient practices across the market. There’s a lot of opportunity for sellers who are ready—new listings have increased visibility and homes are spending less time on the market. Pending sales growth is the first sign of recovery, so the strong gains in May pending home sales throughout the MSA is encouraging. With continued population growth and pent-up demand for housing, our region’s housing market will ultimately rebound.”
Here are basic stats on residential sales for April 2020 for the City of Austin and the greater Austin area:
I have been tracking the local market on a more fine-grained time scale since the beginning of the pandemic. Note the steady increase in pending listings (i.e., listings that go under contract to be sold).
As of June 13th, 2.5 million Texans have filed for unemployment relief since mid-March. State sales tax revenue was down 13.2% from May 2019 (source). How long it will take to unwind the unemployment situation and what lasting effects this will have on the market and consumer behavior are one of the most significant unknowns about our current situation.
This chart of passenger traffic at Austin-Bergstrom International Airport starkly illustrates how rapidly and severely the Austin area economy changed:
Major companies and employers are still finding Austin attractive. As you might know, Tesla has signaled interest in Texas over the past couple of years, but rumor now has it that they are very likely building their newest “Terafactory” in the Austin metro area to produce their new Cybertruck and Model Y. According to the Austin Business Journal,
The California-based company is seeking property tax abatements from Del Valle Independent School District for the construction of a 4 million- to 5 million-square-foot manufacturing facility within the 2,100-acre Austin Green site along the State Highway 130 toll road, according to documents submitted to the state. The facility could create more than 5,000 jobs. Construction could begin in the third quarter of this year.
This has yet to be announced or confirmed, and speculation last month was at a totally different location in the northern metro. However, the the potential site mentioned above is located in the green area on the map below:
