Austin Market Monthly Update - May 2020
COVID-19 exacerbates inventory shortage in Austin area; home sales drop
The Greater Austin area continued to feel the stark effects of COVID-19, as housing inventory dropped to critically low levels of less than 2 months of inventory in Austin, Travis County and Williamson County, according to the Austin Board of REALTORS® (ABoR) latest Central Texas Housing Market Report.
Compared to May 2019, residential sales in the five-county Metropolitan Statistical Area (MSA) decreased 29.2% to 2,697 sales, while sales dollar volume dropped 30.8% to $1,092,374,935. At the same time, the median sales price increased 0.7% to $329,893 and homes spent three fewer days on the market—an average of 47 days.
"We're seeing home sales drop because we simply don't have enough inventory on the market," Romeo Manzanilla, 2020 ABoR president, said. "We recognize there’s still an element of discomfort with listing one’s home during the pandemic and Austin REALTORS® are taking every precaution to ensure safe and efficient practices across the market. There’s a lot of opportunity for sellers who are ready—new listings have increased visibility and homes are spending less time on the market."
Mark Sprague, state director of information capital at Independence Title, said that although real estate was deemed essential, it was significantly impacted by the slowing economy. "If you compare Austin's home sales to the majority of large cities in the U.S., you'll find Austin's market has remained strong," Sprague said. "But, because sales numbers have a one-to-three-month lag time, it was no surprise May sales declined and we'll likely see the same in June and July. The solution is increased housing stock. Until more homes are put on the market, we won't see home sales recover anytime soon."
In the Austin-Round Rock MSA, an 18.8% decline to 6,086 active listings pushed housing inventory down further to 2 months, 0.6 months lower than May 2019. During the same period, new listings declined 15.8% to 4,151 listings, while pending sales jumped 14.2% to 4,287 sales.
“Pending sales growth is the first sign of recovery, so the strong gains in May pending home sales throughout the MSA is encouraging,” concluded Manzanilla. “With continued population growth and pent-up demand for housing, our region’s housing market will ultimately rebound.”
City of Austin
In the city of Austin, continued demand and limited inventory drove home prices up, as sales dropped due to fewer listings. The median price for residential homes increased 10.7% year over year to $424,050. Residential sales decreased 36.6% to 826 sales, and sales dollar volume decreased 32.5% to $418,410,453. During the same period, new listings fell 18.7% to 1,348 listings, active listings decreased 13.5% to 1,684 listings and pending sales declined 4.9% to 1,216 pending sales. Monthly housing inventory decreased 0.2 months year over year to 1.7 months of inventory.
At the county level, residential sales declined 33.8% to 1,319 sales, and sales dollar volume dropped 35% to $644,917,945. The median price for residential homes increased 4.7% year over year to $398,345. During the same period, new listings decreased 17.1% to 2,162 listings, while active listings declined 19.7% to 2,959 listings. Pending sales slightly increased 1.1% to 2,016 pending sales. Monthly housing inventory decreased 0.5 months year over year to 1.9 months of inventory.