July 2020 Austin Market Report
The Austin area real estate market has steamrolled through 2020 so far with little regard to the pandemic. According to the Austin Board of REALTORS (ABoR), July 2020 saw significant year-over-year gains in closed sales (21%), new listings (20%), and pending sales (25%). The median sales price in Austin was up 11% over the same period to $423,000, with the broader metro area up 10% to $353,000. The area market entered the pandemic in an extreme seller’s market. The pandemic has tightened inventory further, with Austin dropping to 1.7 months and the metro area dropping a whole month down to match Austin at 1.7 months of supply.
So far, then, the Austin area market is maintaining its familiar overall pattern of extremely low listing inventory, sky-high buyer demand, and steadily rising home prices. Investors and retail buyers hoping for conditions less favorable to sellers have so far only seen the opposite throughout the pandemic.
ABoR President, Romeo Manzanilla, commented: “Our market is now ultra-competitive because of our dangerously low inventory and that is cause for concern over the long-term. Homeowners thinking of listing their home need to understand the opportunities in the market and our elected leaders should focus on promoting policies that create increased housing capacity. The jobs pipeline into Austin continues to create new economic opportunities and a double-digit percentage gain in new listings in July, coupled with buyers continuing to take advantage of historically low interest rates, allows us to be cautiously optimistic about the remainder of 2020.”
Here are basic stats on residential sales for July 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:
As of August 8th, 3.2 million Texans have filed for unemployment relief since mid-March. In July, state sales tax revenue was up 4.3% from the same time in 2019 (source) as the Texas economy tries to manage the pandemic and recover from the economic shutdown. Texas' unemployment rate was 8.6% in June 2020, a drop from the 13% rate in May. The jobless rate in the Austin-Round Rock metro was 7.5% in June 2020 compared to 11.4% the previous month:
This chart of passenger traffic at Austin-Bergstrom International Airport drives home rapidly and severely the Austin area economy changed. However, it also shows traffic slowly creeping up from the bottom:
Despite the pandemic, Austin’s business climate, large talent pool, and comparatively "low" cost of living continues to attract major employers. As you all know by now, Tesla announced a $1.1 billion Gigafactoy in a heretofore undeveloped area of far East Austin to initially employ roughly 5,000. BAE Systems also announced a major expansion in North Austin. So, while there are many economic and political uncertainties, indicators strongly suggest that the Austin and Central Texas area is weathering the economic storm and that the decade-long boom in Austin's housing market was real and sustainable.
