June saw rebound for Austin-area home sales

After a couple of months of steep double-digit declines, Central Texas home sales rebounded in June across the Austin area, the Austin Board of Realtors said Tuesday.

Sales in the Austin-Round Rock region were up 9.3% in June compared with June of 2019, the board said. The increase helped hold sales to only a 5.2% drop in the first half of 2020, during which the market took a hit from the coronavirus pandemic.

For April and May, the board reported sales declines of 21.6% and almost 30%, respectively.

"After several months of stay-at-home orders, the Austin metro area in June showed signs of a hot housing market," said Josh Stech, CEO of Sundae, a residential real estate marketplace. "Pent-up demand appears to be a real thing, as buying activity and speed of sale are both heating up."

In June, there were 3,969 sales of single-family homes, townhomes and condominiums, according to the Austin Board of Realtors. Half of the properties sold for more than $340,000 and half sold for less, for a 4.6% increase in the median home-sales price.

Austin

Pending sales, a forward-looking indicator, jumped by 33.7% with 4,737 homes in the pipeline to close. Housing inventory declined to 1.8 months of inventory, "demonstrating an extremely competitive and tight market across the region, even as it begins to show signs of improvement," the board said.

"Strong home sales in June are good news for the real estate market across the region," said Romeo Manzanilla, president of the Austin Board of Realtors. "The increased sales last month helped limit the impact of the pandemic on the first half of the year overall."

An increase in pending sales could signal a strong July, Manzanilla said. But he added: "We have to remain cautious as Texas experiences a spike in COVID-19 cases and we are seeing shrinking housing inventory."

Jim Gaines, chief economist for the Real Estate Center at Texas A&M University, said that despite the January-through-June sales decline, "we are still on track for a strong year."

Last year marked a run of nine straight record-setting years in the Central Texas housing market.

"There are plenty of unknowns in the months ahead, but June home sales ... being up 9.3% year-over-year was tremendous when considering the strength of 2019," Gaines said.

Gaines said that while June saw strong home sales numbers across all of Texas, Austin's inventory shortage remains problematic.

"Extremely low inventory is one of the factors that affects overall sales dollar volume while simultaneously creating a very competitive and tight market," Gaines said. "Homebuilders aren't building quite as many new homes and sellers were hesitant to list their home during shelter- in-place orders. Even if we end up with a 3 to 4% decline in sales in 2020, that would still be a strong year for the region."

Across Central Texas, there were 17,043 residential sales in the first six months of this year, down 5.2% from the same period last year, the board reported. The median price for those sales was $325,000, a 4.9% increase over the first half of 2019.

Within Austin's city limits, home sales declined 13.6% in the first half of the year, with 5,291 sales reported. The median price rose 9.7% to $406,000.

For June, sales in Austin's city limits were down 5.3% compared to the prior June and the median price was up 3.3% to $407,000.

"Homes in Austin continue to sell quickly with multiple offers," said Mary Anne McMahon of Remax Posh Properties. "Historically low-interest rates are contributing to strong buyer demand. Inventory remains low as many potential sellers have placed their plans on pause as a result of COVID-19."

Jason Hoelter, an agent with Realty Austin, said housing supply remains low and demand is high. Like McMahon, he said low interest rates likely are a key factor in the decision to buy right now.

"I still see a lot of people from California, but people come from all over the country," Hoelter said.

When local shelter-in-place orders were lifted in May, it unleashed "strong pent-up demand for homes from those who had already planned to buy earlier in the spring," said Eldon Rude, an Austin-area housing market consultant.

"You add an increasing desire from those looking to flee density, as well as interest rates dropping by over one-half percent, and the result was a big increase in June closings," Rude said.

Rude said sales would have been even higher in June had there been more homes on the market.

"But with sellers hesitant to list their homes during the pandemic, and such strong demand, we are seeing an extreme shortage of inventory. With inventory levels this low, I expect to see prices continue to go up in the short term," Rude said.

Stech also said that the imbalance between supply and demand is pushing prices higher, a recurring theme in the local market for some time.

"Because life hasn't completely returned to normal yet, housing supply is still limited," Stech said. "Many prospective sellers are reluctant to go through the sales process during an ongoing pandemic." And while more sellers are becoming comfortable listing their homes for sale, Stech said, there are still "too few active listings to reach an equilibrium at which prices are stable."

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Housing markets Purchase Home prices Housing inventory Texas
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