By Frank Zuniga, Realtor for Greg Weber Realtors, Inc.
September 17, 2020. It appears the Austin-Round Rock metropolitan statistical area (MSA) is on the rebound from the downturn in the market due to the pandemic. The August 2020 numbers have been compiled and they show a 12.9 percent year over year (YoY) increase from the same month in 2019. This increase comes from 4019 total sales with 3234 being existing home resells for all types of homes – single family, condominiums, and townhomes. The remaining 783 were new construction homes sold and of those 721 where single family homes, 48 were condominiums, and just 14 were townhomes. The median price in the MSA has now increased to $355,000 which is a $2,000 increase just from the previous month of July 2020 and an 11 percent increase from August 2019.
What hasn’t yet rebounded all the way is inventory which is still down. Active listings dropped by 44.9 percent YoY to 4257. August 2019 had 2.7 months of inventory and August 2020 had just 1.4 months of inventory. The Texas Real Estate Center at Texas A&M University uses an inventory level of 6 months to indicate a balanced market. So our market is far from being balanced and leaders continue to tell how housing supply and job availability are two key factors necessary for a long term recovery.
Austin Board of Realtors President, Romeo Manzanilla commented on the statistics by saying, “The pandemic has put our market in a unique situation. As more people are working from home and have the opportunity to relocate, Austin-area homes are selling faster now than ever before.” He also added, “Austin’s popularity has left the market with critically how inventory levels of housing supply, which continues to drive home prices up. While home prices are rising, historically low interest rates are giving buyers increased power to meet the increases. Buyers should be aware of just how competitive this market has become and would benefit enlisting the help of a REALTOR who can help every step of the way during the home buying process.”
In the five county area that makes up the MSA, all counties except Caldwell County saw in increase in the median home prices compared to the same month in 2019. Caldwell County saw a 1.7 percent decrease to a median home price of $212,900. Hays and Bastrop counties saw large increases of 16.9 percent and a 16 percent, respectively. That increase resulted in a $308,500 median price in Hays County and a $278,500 median price in Bastrop County. Williamson County saw 5.7 percent increase which left the median home price at $307,500. Travis County had the largest increase of these counties – statistics revealed a 19.2 percent and this raised the median home price to $430,000. The board of realtors’ statistics track the City of Austin proper on its own and it saw a median price increase of 14.9 percent; bringing the median home price inside the city limits to $435,000.
The Condominium Conundrum and Perhaps New Upcoming Opportunities
One thing that I am starting to see in the statistics in that less people are buying new condominiums. There were only 48 condominium closed sales in August and that was a 27.3 percent decrease YoY. It is also important to note that those 48 closed sales had a median price per square foot of $371. This is a 19.3 percent increase YoY. Condominiums are far more expense than resell and new construction homes. Resell homes had a median selling price of $212 per square feet and new construction homes had a median selling price of $188 per square foot. You also have to consider that condominiums also have higher monthly HOA fees that other types of homes. In some premium locations condominium monthly HOA fees can be as high as 50 cents per square foot. So if you have a 1500 square foot condo that means you end up paying $750 per month in HOA fees. We also have to consider that living in a condominium is like living in an apartment as far as the close distances to neighbors. This may be part of the backlash against dense living that we’ve heard about due to the pandemic or it could be a combination of things. One thing I know is that condominium builders have to get their products sold. The longer their newly built condos stay vacant, the less profit they will be making. So if push comes to shove, condo builders may have to lower their prices, create other incentives, or combine these things in creative ways to get buyers. Either way it is an interesting development and I will keep an eye on these stats to see in which direction they are headed. If we see some great deals developing on condos, I’ll make sure and let you know right away so you can get the best picks!
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This article included information from included information published by the Austin Board of Realtors with the August 2020 market report for the Austin-Round Rock MSA. The MSA includes the 5 county area of Travis, Williamson, Hays, Bastrop, and Caldwell counties.