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The Gibbs Team

512-431-2403

Austin Real Estate Market

July 15, 2016 By Mary Lynne Gibbs

June & Mid-Year 2016 Austin Real Estate Review

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Click on any image above to view infographics for each area.

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Austin Board of REALTORS® releases June 2016 & Mid-Year 2016 Central Texas Housing Market Report

AUSTIN, Texas – July 15, 2016 – Single-family home sales and prices experienced strong gains throughout the Central Texas region in the first half of 2016, according to the June & Mid-Year 2016 Central Texas Housing Market Report released today by the Austin Board of REALTORS®.

“Despite the ongoing housing shortage and affordability challenges impacting our region, population growth and housing demand continue to drive home sales upward,” said Aaron Farmer, 2016 President of the Austin Board of REALTORS­®. “The Austin-Round Rock housing market is on track to outpace 2015 market levels, which was a record-breaking year for home sales.”

Austin-Round Rock Metropolitan Statistical Area (MSA)

Single-family home sales in the five-county Austin-Round Rock MSA rose 6.1 percent year-over-year to 14,482 home sales in the first half of 2016, while median price rose seven percent year-over-year to $282,000. Home listings also experienced gains in the first half of the year, with active listings increasing 6.6 percent to 5,290 listings, new listings rising 5.7 percent to 20,060 listings, and pending sales rising 7.2 percent to 15,909 sales.

Rising home sales and home prices means a greater impact on the region’s economy as well. Sales dollar volume in the Austin-Round Rock area was $5,073,874,678, an 11.5 percent increase from the first six months of 2015.

Single-family housing market activity continued to be strong in June 2016, with home sales jumping to 3,219 sales, an 8.5 percent increase compared to June 2015. Median price rose 8.2 percent to $295,500 during the same time frame. Monthly housing inventory remained unchanged at 2.5 months, which is less than half of the Real Estate Center at Texas A&M University’s benchmark of 6.5 months as a balanced housing market.

City of Austin

Despite ongoing housing affordability challenges, single-family home sales in the City of Austin increased 3.4 percent to 4,465 home sales in the first half of 2016. Of the 21,036 single-family homes sold in the 18-county Central Texas region in the first half of 2016, approximately only one in five (21 percent) were sold within the Austin city limits. Median price increased 5.6 percent to $339,652 in the first half of the year, while active listings jumped 20.1 percent to 1,298 listings during the same time frame.

In June 2016, Austin home sales increased 2.6 percent to 975 home sales, while median price increased only 2.9 percent to $350,000. Monthly housing inventory increased 0.3 months to 2.1 months, while homes spent a little more than one month (32 days) on the market on average, an increase of two days from June 2015.

“The Central Texas housing market is performing very well, but extreme housing shortages across the region continue to be a challenge,” said Jim Gaines, Chief Economist at the Real Estate Center at Texas A&M University. “Homes under $300,000 have less than two months of inventory in the Austin-Round Rock MSA, which means that housing at these price ranges is essentially nonexistent. The growing “donut effect” of homes sales activity as homebuyers move outside Austin city limits in search of more affordable housing is on pace to continue in the near future.”

Travis County

In the first half of 2016, Travis County single-family home sales increased 4.9 percent year-over-year to 7,203 home sales–nearly half of all single-family homes sold in the five-county MSA during the same time frame. In the meantime, median price increased 7.8 percent year-over-year to $330,000. In June 2016, single-family home sales increased 5.2 percent to 1,567 home sales, median price rose 10 percent to $357,500. However, monthly housing inventory stayed steady at 2.6 months.

Williamson County

Williamson County single-family home sales jumped 11.9 percent year-over-year to 1,140 home sales in June 2016, while median price rose 8.7 percent to $269,500 during the same time frame. Housing inventory dropped 0.2 months to 2.1 months of inventory in June 2016, making the housing shortage in Williamson County equally as critical as in the City of Austin.

In the first half of 2016, single-family home sales jumped 7.2 percent to 4,966 home sales, while median price rose 6.3 percent to $260,000. More homes were sold in Williamson County in the first half of the year than in the City of Austin (4,465 home sales year to date), despite having a population half the size of the City of Austin’s.

Hays County

In the first half of 2016, Hays County single-family home sales rose 5.1 percent year-over-year to 1,677 home sales, while median price increased 4.7 percent year-over-year to $243,000. As a result of strong housing development and sales activity throughout the county, new listings increased 12.2 percent year-over-year to 2,332 listings and active listings jumped 17.3 percent year-over-year to 732 listings in the first half of the year. In June 2016, single-family home sales increased 5.8 percent year-over-year to 366 home sales, while median price crept up 2.3 percent to $249,950 during the same time frame.

“It’s important that we think of the growing housing affordability crisis not just as an Austin issue, but also as a regional challenge,” concluded Farmer. “Housing supply shortages have reached critical levels throughout the region and areas with affordably priced homes are becoming smaller and father away from jobs. Some homebuyers are now looking at homes an hour or more outside of Austin to find a home that they can afford. City of Austin leaders as well of those of surrounding cities must come together to solve our region’s challenges in housing supply, affordability and infrastructure.”

Filed Under: Blog Tagged With: Austin Real Estate Market, Keller Williams Realty, Market Update, The Gibbs Team

June 23, 2016 By Mary Lynne Gibbs

May 2016 Austin Real Estate Review

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AUSTIN, Texas – June 21, 2016 – Single-family home sales jumped in Williamson County and across the Austin-Round Rock Metropolitan Statistical Area (MSA) in May 2016, according to the May 2016 Central Texas Housing Market Report released today by the Austin Board of REALTORS®.

“Housing demand continues to be at an all-time high in the Central Texas region, with properties priced under $500,000 selling rapidly,” said Aaron Farmer, 2016 President of the Austin Board of REALTORS­®. “Williamson County homes are among the most popular in the region due to the county’s highly-rated school districts, access to major thoroughfares and proximity to major employment hubs in Austin.”

Williamson County’s population is less than half that of Travis County, yet only 424 more single-family homes were sold in Travis County than Williamson County in May 2016. Williamson County home sales surged 19.5 percent year-over-year in May to 1,028 single-family home sales.

Single-family home sales also increased by double-digit margins across the Central Texas region, rising 13.2 percent annually to 4,297 home sales in May 2016. In the five-county MSA, single-family home sales rose 9.9 percent year-over-year to 2,909 home sales during the same time frame.

“Austin-Round Rock unemployment recently hit a 16-year low, largely thanks to Austin’s booming tech sector,” said Eldon Rude, principal at 360 Real Estate Analytics. “Tech companies such as Apple Computer continue to fuel employment growth in Northwest Austin and in turn, are driving home sales growth in southeast Williamson County where homes are less expensive and new home development continues to be strong.”

High home prices and critically low inventory levels continued to stifle home sales within the City of Austin, as more homebuyers look outside of Austin’s city limits for affordably priced housing. In May 2016, Austin single-family home sales remained statistically unchanged at 884 home sales.

Home prices throughout the Central Texas region continued to increase in May 2016, but at a slower pace. In the five-county MSA, median price rose 4.8 percent year-over-year to $288,085. In Williamson County, median price rose 5.2 percent annually to $261,822. The median price within Austin’s city limits was $355,000 in May 2016, a 1.6 percent increase from the year prior.

Monthly housing inventory within the Austin-Round Rock MSA was 2.4 months in May 2016, statistically unchanged from the year prior. Housing inventory within the City of Austin rose 0.2 months year-over-year to 1.9 months of inventory, while inventory within Williamson County fell 0.3 months annually to 1.9 months during the same time frame.

Housing inventory levels lower than 2.0 months are considered an extremely tight market by the Real Estate Center at Texas A&M University, which cites an inventory level of 6.5 months as a market in which the supply and demand for homes in balanced.

In the Austin-Round Rock MSA, pending sales jumped 21.1 percent to 3,297 pending sales in May 2016. Double-digit gains in pending sales were also evident across the 18-county Central Texas region, within the City of Austin and in Travis and Williamson counties.

“Strong gains in both pending sales and active listings both in Austin and regionally indicate a strong summer selling season could be ahead,” concluded Farmer. “A Central Texas REALTOR® can provide in-depth market expertise to help homebuyers and sellers navigate competitive housing market conditions.”

Filed Under: Blog Tagged With: Austin Real Estate Market, Keller Williams, Keller Williams Realty, Market Update, The Gibbs Team

June 20, 2016 By Mary Lynne Gibbs

Luxury homes trending towards buyers’ market

The Bureau of Labor Statistics released its most recent job report showing that the U.S. economy added only 38,000 jobs in May, far below expectations. That’s much lower than the 150,000 new jobs the economy was expecting. A low jobs report number is a sign of a sluggish economy. The headline number was reduced by 35,100 due to striking workers at Verizon Communications. Without the strike, payrolls would have increased by 73,000. Either way, the jobs growth in May was much slower than it was earlier in the year.

Chart 1

Construction lost 15,000 jobs. That signals a slowdown in the housing market. U.S. manufacturing lost 10,000 jobs due to a strong dollar that hurt exports. Durable goods lost 18,000 jobs, with 500 from auto manufacturing. Pay close attention to how many manufacturing jobs are added or lost each month, since it is a future indicator of economic health. That’s because factories are less likely to add workers until they have orders for more goods in hand. Manufacturing employment provides a better leading indicator of future economic performance than does service employment, which stays more consistent through thick and thin.

The US hasn’t seen such low positive jobs gains since December 2010 — or, in other words, since the aftermath of the Great Recession.

What effect does this have?

  • The US dollar is getting slammed in world currency markets. When there is not confidence in the American labor market, the dollar loses value against other currencies. If the American dollar loses value, you lose buying power. As most of us know wages have not kept up with inflation.
  • With less confidence in the strength of the labor market, stock values drop historically.
  • Consumers are running for the safety of US Treasuries.

Another worrying sign is that the weakness in job creation appears to be spreading across industries.

Chart 2

Earlier this year, only mining and logging, durable goods manufacturing, and transportation were posting job losses. This was easily explained by shrinking domestic oil production as a result of a sharp decline in crude oil prices. Employment in oil extraction (part of the mining and logging sector) was shrinking, as was production of heavy equipment used in the oil sector, leading to job losses in durable goods manufacturing. Transportation of domestic crude oil (much of which is done by rail) was falling as well. There was a possibility that the weakness and the job losses would be contained in the industries affected by crude oil production.

But in April and May, it seems that the job losses spread to other industries. Now, in addition to mining, durable goods manufacturing and transportation, job losses have appeared in construction, wholesale trade, utilities, retail sales, and information services (although the last one is mostly due to a strike). Other industries continue to add jobs, but at a much slower pace than before. This is a worrying sign.

And yet, the unemployment rate still fell in May to 4.7 percent, from 5 percent in April. How can this be? The answer is not encouraging – the drop in the unemployment rate is mostly driven by people dropping out of the labor force. In May, 458,000 people left the labor force, after 362,000 did so in April. Such a substantial decrease in the labor force for two months is a row is unusual (see below) and is yet another worrying sign.

Chart 3

This was a very disappointing employment report with several worrying signs for the economy long term. It makes it nearly certain that the Federal Reserve will not raise interest rates when it meets in June. We will be watching other data carefully to see if the worrying signs seen here are confirmed by other information.

Local impacts

Austin and the other Texas metros continue to be sellers’ markets, with not enough commercial or residential inventory. However there are concerns in certain portions of the residential market, namely in luxury sales in Austin above $1 million.

The charts below show Austin luxury sales are still robust compared to the recession, but slower than 2013 or the highs of 2015.

Chart 4

So what happened? Take a look at the Austin $1+ million inventory report below. It clearly shows that in 2016, luxury above a million sales slowed and the amount of inventory picked up. Inventory doubled since 2015 to 20 months, reflecting a buyers’ market.

Chart 5

Consumer confidence in the Texas region has dropped 35 points in the last year. Consumers are not feeling as flush as they have previously. Luxury is showing it first. Historically the top portion of the market begins to show a slowing of the market first. It is not just a regional thing, we are seeing national GDP and inflation slow dramatically this last quarter. Declines in oil, rumors of another tech bubble, and confusing election hyperbole are causing many to be much more conservative in their selection process.

What would I tell your clients that are buying or selling in the over $1 million price category? It is still a good market if your listing is priced correctly. Those homes that are within 95 to 100% of the median price per square feet are still selling quickly. Be aware of what is in the neighborhood and what is in that price range. Not all houses are created equal. Values cannot be based just on square footage. Sellers will have difficulty moving their properties if they ‘ego price’.

On the demand side of the equation, some have asked if there are fewer companies and executives moving to Austin or other Texas metros. Those at the Chamber of Commerce are still seeing quality companies and executives moving here. However many in the equity business feel that technology is overvalued like 1999, and that there should be a correction. Therefore executives are much more conservative in spending, because of what they are hearing from markets. Trophy properties are taking almost three times as long to sell in Austin as what the rest of the market is doing.  As an analyst, I will tell you if priced correctly it should still sell.

Otherwise it is very much a sellers’ market. Austin is still creating jobs, the rental market continues to be tight, and most homes if properly priced have multiple offers. Real estate appreciation is apparent in all markets, channels, and Texas metros. At most price points there is not enough rentals or homes for sale. Foreclosures and short sells are a non-factor at less than 1% of the market. The Texas real estate market is still strong in all channels, but there is some softening in luxury homes. So yes, the market is changing, and yes we should continue to watch.

Filed Under: Blog Tagged With: Austin Real Estate Market, buyer's market, Keller Williams, Keller Williams Realty, Market Update, National Real Estate Market, The Gibbs Team

May 20, 2016 By Mary Lynne Gibbs

April 2016 Austin Real Estate Review

Rising home sales throughout Central Texas highlight growing urban sprawl, Austin affordability challenges

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May 19, 2016 – Single-family home sales increased in the Austin-Round Rock Metropolitan Statistical Area (MSA) in April 2016, highlighting growing urban sprawl as rising housing costs exacerbate affordability challenges, according to the April 2016 Central Texas Housing Market Report released today by the Austin Board of REALTORS®.

“Much of Central Texas’ home sales activity is now taking place outside of Austin’s city limits, with housing demand driving growth in surrounding counties,” said Aaron Farmer, 2016 President of the Austin Board of REALTORS­®. “The City of Austin’s housing market is drastically different than surrounding areas. In Austin, home sales growth is suppressed, inventory is more constrained and home prices are much higher.”

In April 2016, single-family home sales increased 12.5 percent year-over-year to 3,863 home sales in the Central Texas region. Nearly 80 percent of those homes were sold outside of Austin’s city limits. In the five-county MSA, single-family home sales rose 5.1 percent year-over-year to 2,600 home sales during the same time frame.

Hays County experienced the largest annual gain in home sales in April 2016, with single-family home sales jumping 17.8 percent year-over-year to 338 home sales. Williamson County was the only county in the Austin-Round Rock MSA to experience a decline in home sales in April 2016, with single-family home sales dropping 5.1 percent year-over-year to 816 home sales.

In the City of Austin, single-family home sales held steady at 829 home sales, a 1.7 percent increase from April 2015 and nearly equivalent to the home sales volume in all of Williamson County in April 2016.

“Hays County is one of Austin’s few surrounding areas with entry-level homes priced less than $200,000, a price point with high demand,” said Mark Sprague, State Director of Information Capital for Independence Title. “In Williamson County, demand is highest for homes priced between $200,000 and $400,000, but there is not sufficient housing stock to meet demand, particularly in Round Rock and Pflugerville.”

The rate of growing home prices also slowed in Williamson County in April 2016, with the median price for single-family homes increasing only two percent year-over-year to $255,000. Conversely, the median price in Travis County increased 7.8 percent from April 2015 to $339,500, while median price within the City of Austin jumped 10.6 percent during the same time frame to $359,450.

Despite small gains across the region in April 2016, monthly housing inventory in the Austin-Round Rock MSA remained low at 2.3 months. This is nearly two-thirds less than the 6.5 month-level the Real Estate Center at Texas A&M University cites as a market in which supply and demand for homes is balanced. In Austin, housing inventory remained at near-critical levels of 1.8 months, an increase of 0.3 months from April 2015.

“Housing affordability includes not only a home’s sale price, but the homeowner’s ability to continue to afford the home as property values rise from year to year,” concluded Farmer. “The Austin Board of REALTORS® encourages homeowners to learn how their home is being appraised and all property tax exemptions they might qualify for. A Central Texas REALTOR® can help homeowners contest their assessment by identifying comparable properties and gathering the necessary background information to formulate an appeal.”

Filed Under: Blog Tagged With: Austin Real Estate, Austin Real Estate Market, Keller Williams, Keller Williams Realty, Market Update, The Gibbs Team

April 21, 2016 By Mary Lynne Gibbs

March 2016 Austin Real Estate Review

ABoR calls attention to housing diversity issues in Central Texas amidst rising home prices

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March 2016 Statistics

• 2,552 – Single-family homes sold, 9.3% more than March 2015
• $278,000 – Median price for single-family homes, 7.8% more than March 2015
• $347,734 – Average price for single-family homes, 4.5% more than March 2015
• 54 – Average number of days single-family homes spent on the market, unchanged compared to March 2015
• 3,633 – New single-family home listings on the market, 12.2% more than March 2015
• 4,669 – Active single-family home listings on the market, 12.2% more than March 2015
• 2,811 – Pending sales for single-family homes, 7.2% more than March 2015
• 2.0 – Months of inventory of single-family homes, 0.2 months less than March 2015
• $887,419,074 – Total dollar volume of single-family properties sold, 14.1% more than March 2015

April 21, 2016 – According to the Multiple Listing Service (MLS) report released today by the Austin Board of REALTORS®, Austin-area single-family home sales increased 9.3 percent to 2,552 home sales in March 2016 compared to the same month the year prior. Median single-family home price also increased 7.8 percent year-over-year, reaching $278,000 in March 2016.

“Home sales continue to rise throughout the region, but for many Austin-area residents, homeownership is just not a feasible option,” said Aaron Farmer, 2016 President of the Austin Board of REALTORS­®. “Longtime Austin residents are being priced out of their homes and many are unable to live close to their work or school. As a city, we have to start being mindful of how our property development, appraisal and code enforcement decisions impact not only housing affordability, but also the diversity of our neighborhoods and communities.”

Demonstrating the need for additional housing supply, Austin-area monthly housing inventory was 2.0 months in March 2016, a decrease of 0.2 months from March 2015. This figure is still well below the 6.5 month level the Real Estate Center at Texas A&M University estimates as a balanced housing market. Homes spent 54 days on market in March 2016, unchanged from the year prior.

Farmer adds, “The City of Austin’s ineffective code enforcement and land development code are immediate barriers to achieving more diverse, affordable housing options throughout our city, both by failing to preserve existing housing stock through proper code enforcement and restricting infill and further development where additional housing options are needed most.”

Blanca Garcia, Owner and Broker with Casa Blanca Realty, specializes in rapid re-housing and serving traditionally underserved populations. She connects her clients with the financial education they need to get preapproved for a home purchase through groups that offer homebuyer education classes, such as those offered through Habitat for Humanity.

“Working families and young professionals have been priced out of the city for years and these affordability issues are now extending to surrounding areas of Central Texas like Manor and Kyle, with some current Austin residents looking as far out as Lockhart to find an affordable home” said Garcia. “We need creative and collaborative solutions to provide more housing inventory and help homeowners continue to call Central Texas home.”

New listings increased by 12.2 percent to 3,633 listings and active listings increased 1.5 percent year-over-year to 4,669 listings in March 2016. During the same time frame, pending sales increased 7.2 percent to 2,811 sales.

“The Austin Board of REALTORS® is taking action to encourage greater housing diversity in Central Texas by providing enhanced REALTOR® education on fair housing and diversity issues. We want homebuyers and sellers to know that REALTORS® can help them take advantage of homebuyer assistance programs and pre-purchase counseling to find their future home,” concludes Farmer.

Filed Under: Blog Tagged With: Austin Real Estate, Austin Real Estate Market, Keller Williams, Keller Williams Realty, Market Update, The Gibbs Team

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