October 2018 Market Report

[David Ivy]

The October 2018 Central Texas Housing Market Report is out from the Austin Board of REALTORS® (ABoR). Last month saw record breaking single-family home sales and dollar volume in the Austin-Round Rock MSA. This is despite last months 5% decline in homes sales year over year. In the five-county MSA, sales dollar volume increased 8.8% year over year, with sales volume increasing 4.3% over the same period. However, Steve Crorey, 2018 ABoR president, makes the familiar note that, despite strong sales volume, housing supply is extremely inadequate to meet demand: “Over the past several years, Austin's housing stock and home sales have become opposing forces that are widening our housing gap. We saw slight inventory increases across the market, particularly in the suburbs, but they’re not enough to offset ongoing demand.”

Here are basic stats on single-family home sales for August 2018 for the City of Austin and the greater Austin area:

Earlier this month, 73% of Austin voters approved a proposition (Prop A) for a $250 million "affordable housing" bond targeting the city's housing supply and affordability issues. The city will use $100 million of this to purchase land to be developed by the city or by private affordable housing developers, including for-profit developers.  For more info. on how the rest of the $250 million will be spent, see here. 

As you probably already know, Amazon recently announced its selection of NYC and Northern Virginia over Austin as locations for HQ2. While this certainly would have been a major boost to the Austin economy and a boon to many involved in Austin real estate, the area economy is already incredibly strong without HQ2, and we are all familiar with the already extremely low housing inventory, especially in the more "affordable" price bands. Austin is also facing ever worsening mobility challenges without the added stress to the transportation system associated with HQ2. The strong fundamentals of the Austin area economy and housing market remain unchanged. This is in large part why the City of Austin showed little more than superficial enthusiasm about HQ2. Unlike other cities/states, some of which were quite aggressive (or even desperate), the city of Austin offered no incentive package to woo Amazon. In fact, Austin mayor, Steve Adler, believed the onus was actually on Amazon: "[I]f Amazon wanted to enter into a conversation that would be about them and their scale and size and about them being able to help deliver to this city a solution or an answer to mobility or affordability in this city, well then that was a conversation that I would certainly engage in."