Population growth and housing demand have driven home sales and prices up in the first half of 2016. We’re set to outpace 2015 if things keep up the way they have been going, and that’s saying something. 2015 set records for home sales and home prices continue to rise. The Austin Board of Realtors (ABoR) recently release their market statistics which outline statistics for not only Austin proper, but all of the surrounding counties, and the Austin-Round Rock Metropolitan Statistical Area (MSA) as a whole.
In the report, ABoR states that single-family home sales in the MSA rose 6.1 percent in the first half of 2016 to 14,482 home sales. The median price rose seven percent year-over-year to $282,000. Comparatively, home sales in Austin proper increased 3.4 percent to 4,465 home sales, despite the ongoing affordability challenges. However, of the 21,036 single-family homes sold in the 18-county Central Texas region in the first half of 2016, approximately one in five (21 percent) were sold within the Austin city limits.
This is more than likely because, in order to find affordable housing, people are moving outside of the city limits. For example, Williamson County has been growing incredibly fast (one of the fastest growing areas in the nation, actually). In WillCo single-family home sales jumped 7.2 percent in the first half of the year to 4,966 home sales. Another example is Hays County (Buda, Kyle, San Marcos, and Dripping Springs) where, in the first half of 2016, single-family home sales rose 5.1 percent to 1,677 home sales.
Home prices differ significantly in Austin vs. the surrounding areas. Median home prices in Austin increased 5.6 percent to $339,652 in the first half of the year. Quite a high price, considering that the most desirable areas of town, the trendy neighborhoods or the ones with the best school districts, usually fetch an even higher price. The median sales price in Williamson County rose 6.3 percent in the first half of 2016 to $260,000, while the median price in Hayes rose 4.7 percent to $243,000. The latter two are much more reasonable options for first-time homebuyers or families with limited income.
In ABoR’s report, Jim Gaines, Chief Economist at the Real Estate Center at Texas A&M University states, “The Central Texas housing market is performing very well, but extreme housing shortages across the region continue to be a challenge. Homes under $300,000 have less than two months of inventory in the Austin-Round Rock MSA, which means that housing at these price ranges is essentially nonexistent. The growing “donut effect” of homes sales activity as homebuyers move outside Austin city limits in search of more affordable housing is on pace to continue in the near future.”
Monthly housing inventory has sat around 2.5 months the entire first half of 2016, which is well below the 6.5 months the Real Estate Center at Texas A&M University cites as a balanced housing market. This has held true for the entire Central Texas area, as Hayes County sits just a little higher at 3.1 months, and Williamson County sits below it at 2.1 months.
ABoR’s President, Aaron Farmer, also noted the importance of realizing that the growing housing affordability crisis is not just an Austin issue, but a regional challenge. “Housing supply shortages have reached critical levels throughout the region and areas with affordably priced homes are becoming smaller and farther away from jobs.” As the concentration of people grow outwards, even places that were once go-to affordable areas are becoming more expensive. “Some homebuyers are now looking at homes an hour or more outside of Austin to find a home that they can afford,” continued Farmer. “City of Austin leaders as well of those of surrounding cities must come together to solve our region’s challenges in housing supply, affordability, and infrastructure.”
Love it or hate it, rising home sales and prices have a large impact on the region’s economy. A whopping $5,073,874,678 worth of properties were sold in the first six months of 2016; that’s an 11.5 percent increase from the first half of 2015. That’s a lot of money pumped into the local economy. It’s just important to remember that now, more than ever, if you’re attempting to buy a home in the Austin area that the market is extremely competitive. Enlisting the help of a real estate professional is pivotal in ensuring you have the best chance at the home of your choosing.