The Austin area’s housing market continued its record-breaking pace in 2018, the Austin Board of Realtors said.
Both the number of homes sold and the median sales price of those homes reached all-time annual highs, the board said. It was the eighth straight year the market set records highs in those categories.
Last year also came in as the highest-grossing sales year on record, with home sales that generated $11.9 billion in dollar volume, Kevin Scanlan, president of the Austin Board of Realtors, said in a written statement.
Rising property values and increased housing demand led to the record numbers, “as shrinking affordability spread across Central Texas,” underscoring the need for more moderately priced housing, Scanlan said.
With December’s sales tally in, the board said, 30,713 homes changed hands last year, a 2.1% increase over 2017’s total.
Half the homes last year sold for less than $310,400 and half sold for more, for a 3.6% increase in the median price over 2017. The board’s figures cover the five-county Austin-Round Rock region from Georgetown to San Marcos, one of the nation’s fastest-growing regions.
Nationally, 2018 was a down year for the housingmarket . The National Association of Realtors said U.S. existing home sales fell 3.1% in 2018 to 5.34 million units, the lowest total in three years. In December, U.S. home sales tumbled sharply, down 6.4% from November. The median home price nationally was $259,100, which was a 4.8% increase over 2017.
In the Austin-Round Rock region, “for the first time ever, the median price for single-family homes stayed above $300,000 for 10 consecutive months,” Scanlan’s statement said. “While much of the region is benefitting from these higher numbers, increasing home prices are forcing families out of the city of Austin. This phenomenon is leading to lower enrollment in schools and could lead to decreased property tax revenue and budget shortfalls.”
Within Austin’s city limits, the median price for single-family homes increased by 4.1% last year, to $375,760. Sales in the city limits were flat for 2018 compared to 2017.
In December, the median home sale price in Austin was $376,875, up 6.2% over the prior December. Home sales in Austin’s city limits dropped 17.3% from December 2017.
For the region as a whole, the median home sales price dipped 0.8% in December, to $305,000. Sales fell by 11.1% from the previous December, with 2,370 homes changing hands.
Affordability concerns have been a recurring theme in the region, which has seen its median home price increase by 62% over the past eight years, and by 40% in the past five years, according to board data.
Last week, housing industry consultant Eldon Rude said one of his biggest concerns is the widening gap between the median household income in the Austin area and the median home price.
“Home prices are going to continue to go up, as are interest rates, so it makes it more expensive for people to buy a house and keeps (some) people out of the market,” said Rude, principal of 360 Real Estate Analytics.
Rude also noted that some uncertainties in the national and global economies have tempered consumer confidence, and that could cause people to delay making large purchases, like buying a house. Rude predicts new-home construction will be flat this year, making it more competitive for builders to grow sales.
In a written statement, Mark Sprague, another longtime local housing industry expert, said listings began to slow in November, “which is typical of a seasonal slowdown during the holidays.”
“It’s also likely that people are staying in their homes longer to watch their investment increase and keep their current interest rate, said Sprague, who is with Independence Title in Austin.
Jeff Morrison, a real estate agent with JB Goodwin Realtors in Austin, said he expect Austin “to remain a thriving city for jobs and for real estate in 2019.”
“It’s likely that inventory will start catching up with demand, but as Austin’s job market remains one of the strongest in the country, demand for real estate will certainly remain high,” Morrison said.
He said the under-$300,000 range for houses “remains highly competitive, which puts pressure on first-time homebuyers and lower and middle income families seeking to buy.” Still, “Austin remains a great buy, and waiting for the market to change can be very costly in terms of lost opportunity, appreciation, etc.”
Experts say the greatest demand for homes last year was in the $200,000 to $300,000 range, and that builders were forced to look further from Austin’s core to find land that would accommodate homes in that price point.
“It’s almost impossible in Austin to find something under $200,000,” said Steve Dalbey, a broker associate with Moreland Properties in Austin.
Dalbey said that housing inventories are “incredibly low,” so it’s important that sellers have their next home picked out before putting their existing house on the market.
Dalbey’s 2019 outlook for the local housing market is positive. “There was a group in town years ago that had a song, ‘the future’s so bright you gotta wear shades.’ That’s kind of it.”
Sprague’s forecast also is optimistic. “Austin’s strong gross domestic product growth will continue to drive our region’s job growth and need for housing,” Sprague said.
Tribune Content Agency