A recent report from Zillow Group, Inc. shows that housing inventory in the Austin metro fell more than 15% last year. It was the ninth-highest rate of inventory drop in the nation, which also saw a precipitous decrease in overall housing inventory. Despite that, Austin real estate was able to shatter its existing annual home sales record with the highest number of homes sold in one year and the highest overall dollar volume of sales. Additionally, new homes in Austin, TX have become an attractive and affordable option for homebuyers who are struggling to find their Austin dream home.
“Demand for housing reached new heights in 2019, and buyers ate through much of the standing inventory,” said Vaike O’Grady, Austin regional director at MetroStudy.
Austin Area Real Estate Sales in Review
According to an Austin Business Journal report about the recent Zillow report, Austin area real estate inventory dropped 15.6% in 2019. That year, home sales shattered sales records despite a critical shortage of homes, according to the Austin Board of Realtors (ABoR®). According to the board numbers, 33,084 homes were sold in the Austin metro. The 2019 home sales were roughly 7% from 2018, according to ABoR. The area also had almost $13.2 billion in sales volume in 2019, another record and a jump of nearly 11% from the prior year.
Despite these record numbers, ABOR said the housing inventory inside Austin city limits was only 0.9 months in December. In the Austin metro, inventory fell to 1.7 months, the lowest on record.
An Overview of National Home Sales in 2019
In the U.S., the number of for-sale homes is at the lowest point in at least seven years, according to Zillow. And the shortage may get worse before it gets better.
Inventory in 2019 fell 7.5% to its lowest since 2013, which is the first year Zillow began collecting the data. In fact, for-sale housing inventory is down in 31 of the 35 largest U.S. housing market. Seattle, San Diego and Sacramento saw the most shrinkage. Conversely, San Antonio, Detroit, Atlanta and Chicago are bucking the trend and are the only large markets seeing an increase in inventory. San Antonio notably saw an 8.1% increase in inventory in 2019.
The shortage of housing is causing home values to rise.
U.S. home values grew 3.7% in 2019 to $244,054, down from 3.8% year-over-year growth last month. The median home price in the Austin metro also grew 3.7% in 2017 to $333,380, according to Zillow.
More Buyers are Turning to New homes in Austin, TX
Housing inventory refers to how long it would take to sell all of the homes on the market if new listings stopped. A balanced housing market is typically 6.5 months of inventory, according to the Real Estate Center at Texas A&M University.
“It’s crazy to think that we’d be sold out of homes in Austin within two months without any new supply,” O’Grady said.
The lack of supply of housing is putting pressure on resale prices and pushing more buyers to consider new homes, even if it means sacrificing on location and commute time, she said.
“Austin is one of the few markets in the country in which median new home prices are lower than the median resale price,” O’Grady said. “That’s because development is moving further out, and builders are offering smaller homes on smaller lots. Buyers are snapping them up, and we’re seeing record levels of new home sales.”
Outlook for Austin Home Sales and New Homes in Austin
Because of its rapid growth and continued demand for housing, Eldon Rude, principal of 360 Real Estate Analytics, predicted 2020 would be a banner year for the Austin real estate market. At a recent Home Builders Association of Greater Austin meeting, Rude estimated that builders will need to deliver another 18,000 to 20,000 lots this year. To put that in perspective, there were about 18,000 single-family home permits issued in 2019 through November, putting the area on pace to surpass the record of 18,697 permits issued in 2006.
Zillow also recently named the Texas capital the nation’s hottest housing market of 2020, based on the results of a survey of 110 economists and real estate experts. The vast majority — some 83% — of those surveyed expect home values in the Austin metro to grow faster this year than the expected nationwide average of 2.8%.
Continually-high housing demand for Austin area homes has pushed builders to work tirelessly to provide more housing inventory in an effort to keep up with demand. As a result of the increased housing production, ongoing stream of homebuyers to the Austin area and the relative affordability of new homes in the area, three Austin area new home communities have been named the top-selling communities in the nation. The communities are spread throughout the Austin metro, with one far north in Jarrell, one in Liberty Hill, and the last in the City of Buda, which borders Austin on the south.
Sonterra is a new home community built by Centex Homes. The neighborhood offers a community clubhouse, two swimming pools, multiple parks and hike and bike trails as well as playground equipment. Sonterra homes range in size from approximately 1,200 sq. ft. to 2,400 sq. ft. Base prices for floor plans start at about $174,000.
Currently, the community is offering attractive move-in perks including a $2,000 incentive for USAA members, help with closing costs and a new appliance package for contracts signed before the end of the month.
From the Sonterra website:
“Conveniently located off of I-35, Sonterra offers the most affordable new homes in the Greater Austin Area. With short commute times and small-town hospitality, this intimate city is the perfect escape from the daily grind providing a high quality of lifestyle. Sonterra offers affordable floor plans with open and flexible living spaces that fits every lifestyle.”
Visit the Sonterra by Centex website for more info.
Santa Rita Ranch
About 30 miles north of the City of Austin is the award-winning Santa Rita Ranch community. It offers a huge community with homes built by 11 different builders and prices ranging from the $200s to the $700s. The community amenities have earned it a “the best of the best” award in the Austin area.
According to the Santa Rita Ranch website, “Santa Rita Ranch is located in the fastest growing corridor of Northwest Austin, in Liberty Hill, TX. Our master-planned community has a world of fun waiting for you and your family. Enjoy the Texas Hill Country lifestyle in a vibrant community filled with endless opportunities to live, grow, connect and entertain.”
Find out more about Santa Rita Ranch by visiting their website.
On the southern border of the City of Austin lies the City of Buda. Just within the border of Buda is the Sunfield community, which boasts 6 home builders, two huge amenity centers including a lazy-river, a dog-park, disc-golf course, junior-Olympic pool, splash pad and picnic areas. Perhaps the most impressive aspect of the community is its location, which offers convenient access to Austin, San Antonio and the up-and-coming corridor communities. It’s also in close proximity to multiple toll roads that give residents easy access to communities surrounding Austin.
Homes range in size from a little under 1,400 sq. ft. to over 4,000 sq. ft. Prices start in the low $200s.
To learn more, you can visit the Sunfield website.
If you are ready to meet with an experienced Austin real estate strategist to get professional help developing your Austin real estate strategy, reach out to David Brodsky Properties. We’re happy to offer our consultative services to help you develop a personalized strategy to help you achieve your real estate goals in 2020. You can also get referrals to trusted lenders and other real estate professionals to help ensure your success this year.
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