In April, Austin area real estate statistics took a plunge as the full effects of the coronavirus measures were seen the regional real estate statistics. Overall, the number of sales were down throughout the Austin-Round Rock Metropolitan Statistical Area (MSA). Fewer homes were listed in a market with already-constrained inventory. However, industry experts say that home sales numbers appear to be rebounding.
Signs of Austin Real Estate Rebound
During a May 21 webinar, Jonathan Boatwright, co-owner of Realty Austin, acknowledged the steep decline in home sales starting in March. But in the past four weeks, they have picked up substantially and now are higher than they were a year ago. Boatwright also mentioned that new listings have rebounded in conjunction with the warming weather. He anticipates an increase in closed sales and said he has seen a recent trend of people who had pulled their homes off the market re-list them again.
The webinar hosts discussed a pick-up in activity in recent weeks. The increased demand is attributed to record low mortgage rates. The long-standing factor in Austin’s strong real estate market is continued demand coupled with low inventory in certain price ranges. In particular, in the bottom third of the market where the supply of available homes is extremely low, experts and agents say.
Constrained Supply and Austin Home Prices
The region as a whole has just a 2.1 months supply of housing overall, Boatwright said. Experts say 6.5 months is considered a balanced market. Mark Dotzour, who spent 18 years as chief economist for the Texas A&M Real Estate Center, explained the effect of low inventory on price appreciation.
“The further south of 6.5 months you get, the more ferocious price appreciation is…The bottom third of the price range (in Central Texas) still has way more demand than supply,” and he predicts continued strong demand in that segment.
Despite the low inventory and recent decline in sales, the Austin real estate market has performed well. Especially compared to other markets where home sales are still stagnant.
“We are very lucky to be in Austin,” said Mark Sprague, a housing industry expert with Independence Title in Austin. “Other markets are not doing as well as we are.”
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