May was a record-setting month for the housing market both in the city of Austin and Central Texas as a whole, the Austin Board of Realtors said.
In the five-county Central Texas region, the number of homes sold and the median sales price of $335,095 were all-time highs not just for a May, but for any month on record, the board said.
Within Austin's city limits, May's median home price of $407,400 also was an all-time high for any month on record, the board said.
The numbers mark a continuation of the local housing market's hot streak, which has been fueled by the region's ongoing job and population growth. Affordability has become an issue, however, as prices have risen sharply in recent years due to strong demand for housing but not enough inventory.
In its latest report, the board said 3,452 houses were sold in May across Central Texas, 6.2% more than in May 2018 and an all-time monthly record. Half the houses last month sold for more than $335,095 and half for less, for a 4.2% increase in the median sales price, the highest on record.
The dollar volume of last month's home sales spiked 14.8%, to nearly $1.47 billion — the highest volume to date, the board said.
In its April housing report released last month, the board said the region's housing prices appear to be stabilizing. In the first three months of this year, the median price of a single-family home in the Austin-Round Rock region was $320,000, up only 0.2%, which board president Kevin Scanlan said was a much smaller margin compared to previous years. Between 2012 and 2015, for instance, prices increased by as much as 9%, Scanlan said last month.
This week, John Martin, a real estate agent with Keller Williams Realty in Austin, said he has noticed the same trend regarding prices.
"Prices are climbing, although they're not spiking as rapidly as they were five years ago," Martin said.
In the city of Austin, the record median price of $407,400 was a 5.8% increase from May 2018. The 1,010 single-family homes that sold inside the city limits was a 3.4% decline compared with May 2018, the board said, while the surrounding areas all saw strong sales gains. Sales in Williamson County rose 8.4% year-over-year and Hays County saw home sales increase 10.2% compared with May 2018.
"A lack of middle-market housing in the city of Austin is driving demand to the suburbs," Scanlan said in a written statement. "While the Central Texas housing market is healthy and thriving, Austin continues to struggle with housing options that are affordable for first-time homebuyers as the median price surpasses $400,000."
Ashley Brinkman, a broker associate with Realty Austin, said the market is fast-paced, and that can be stressful for both buyers and sellers.
"It is probably the busiest I have ever been as a real estate agent," Brinkman said. "There's a lot less inventory, so I try to have conversations with my buyers and set realistic expectations not only about the market and how fast you have to move, but to have them fully approved and prepared when we start house shopping."
Martin, with Keller Williams, said that mortgage interest rates remaining low "keeps buyers engaged."
Martin said he is seeing strong demand for houses priced at $350,000 and below. Areas including Kyle and Buda are popular among buyers seeking more attainable housing, he said.
Investors are also targeting those areas, he said, as well as neighborhoods in North Austin near the Domain, where a new major league soccer stadium is planned, and near a future $5 billion campus Apple Inc. will be building not far from the tech giant's existing campus.
"Those areas are increasing in value pretty rapidly," Martin said. "The ripple effects are going to be huge."
A recent analysis by 24/7 Wall Street, an online financial news and opinion company, suggested Austin was one of 15 metro areas that is on the "verge of a housing crisis." The report noted that those 15 metro areas had the greatest percentage change in median home value from their prerecession high to current levels, with Austin seeing a jump of 62.1%
In a newsletter to clients last week, Mark Sprague, a longtime Austin-based analyst of the housing and financial industries, took exception to the report. Sprague is state director of Information Capital for Independence Title in Austin.
Among the important economic drivers the title company advises clients to watch in determining whether to buy real estate in Austin, "excessive appreciation in too short a time is not one of them," Sprague said.
"The local real estate and housing dynamics are not reflected in their findings," Sprague wrote. "Austin's strong historical migration, intellectual capital, lack of inventory, real estate and housing values vs. other competitive metros is not used in their methodology. As an analyst who has the good fortune of living in Austin for the last 50+ years, studying local, regional and national market dynamics, know that we are in a good place. Are we in a bubble? No. Do I have economic concerns? Always. But of all the markets nationally and globally, Austin is in the top three in desirability to work, play and raise a family."
Sprague went on to say that the Austin region is 10 or so years into a positive run in its real estate market and economy, with the longest previously being just over six years.
"Other than a catastrophic economic event, Austin has a number of years of positive growth to meet the demand (non-speculative)," Sprague said. "It's not a feeling, but based on numbers."
