Austin Housing Inventory Continues to Flirt with Zero

Austin’s white-hot residential real estate market doesn’t appear to be cooling down anytime soon – even with last week’s record-breaking cold weather. 

Housing inventory for the Austin market dropped to an all-time low of 0.4 months in January, according to the Austin Board of Realtors. That’s down from 0.6 months in December and 0.9 months in November. Experts believe a healthy home market has an inventory closer to six months.

ABOR’s latest Central Texas Housing Market Report predicts that last week’s winter storm will likely fuel housing demand – potentially adding more strain on an already tight market. Experts told Austin Business Journal last week that inventory will likely come off the market in the short-term to address damage caused by the storm.

 “The last week has shown us, once again, that our homes are more important than ever,” Susan Horton, 2021 ABOR president, said in an announcement.

 Vaike O’Grady, Zonda’s regional director for Austin, said housing inventory likely won’t hit the 0.0 mark.

 “We are going to see extremely tight housing supply for the foreseeable future. That said, there are likely some homes on the market that won’t sell no matter the price. I don’t think we’ll ever hit true zero, in terms of months of supply, O’Grady said in an email. 

There were twice as many closings as active listings in January, according to O’Grady, which points to homes selling without ever being listed on MLS.

“Luckily, builders are starting new homes at a very strong pace. The increase in new home inventory is helping to satisfy demand short-term,” she said. “However, builders in Austin also are now limiting sales because they have so much sold inventory to build.  Delays in government approvals and permitting, coupled with materials shortages, mean that build times are getting extended.”

More than 6,000 new homesites are expected to come online between now and the summer, according to O’Grady — but those homes would only keep up with current demand.

“This means that homes will continue to sell as soon as they hit the market, and prices will continue to rise steadily in the months to come,” O’Grady said in a separate statement.

Indeed, the median sales price for a home in the Austin-Round Rock MSA was $365,000 in January 2021, a year-over-year increase of 19%. The total sales dollar volume was $1.16 billion — up 53% from January 2020. Closed sales were up 23% to 2,523, while the average house spent 33 days on the market, down 33 days. New listings were down 11% to 2,878, while active listings were down 73% to 1,369. Pending sales for January 2021 were up 15% year-over-year to 3,365.

 January 2021 home sales were up 23.8% year-over-year for the city of Austin, 23.5% for Travis County, 11.2% for Williamson County, 50% for Hays County, 66.7% for Bastrop County, and 45% for Caldwell County.

Williamson County had the lowest housing inventory last month (0.2 months), while Caldwell County had the highest housing inventory (1.6 months). 

Home sales for the five-county Austin-Round Rock MSA jumped 23.9% in January 2021, according to the ABoR report. 

The complete Central Texas Housing Market Report for January 2021 can be viewed online here.

Texas Realtors, in a statewide year-in-review report, found 40,308 homes were sold in the Austin-Round Rock MSA in 2020, up 8.8% from 2019. Median prices for homes in the Austin metro increased 9.2% last year to $344,000.

 Austin’s housing inventory was at 1.7 months at the end of 2019, the Texas Realtors report added. That number dipped to 0.6 months by the end of 2020.

Courtesy of ABJ. See full article here.