Austin-area home sales hit all-time high, inventory levels rising in July 2015

Austin Board of REALTORS® releases real estate statistics for July 2015

 

AUSTIN, Texas – August 20, 2015 – According to the Multiple Listing Service (MLS) report released today by the Austin Board of REALTORS® (ABoR), Austin-area home sales hit an all-time high, increasing 12 percent year-over-year to 3,149 sales for the month of July.

Barb Cooper, 2015 President of the Austin Board of REALTORS¬®, explained, “We’re in the midst of one of the most active summer selling seasons to-date, with more single-family home sales than ever before. Home prices remain high, but inventory levels have increased steadily throughout 2015, perhaps taking a step toward a more balanced housing market.”

According to the report, the median price for Austin-area single-family homes increased eight percent year-over-year to $269,500 in July 2015, while average price increased six percent to $338,452 during the same time frame.

In July 2015, less than 30 percent of single-family homes sold in Central Texas were priced below $200,000, outside of an affordable range for many Austin-area homebuyers. The majority of pending sales and active listings fall outside of Austin’s city limits in surrounding areas like Cedar Park, Leander, Hays County, Round Rock and Pflugerville, showing that Central Texas residents are continuing to prioritize affordability.

Once again, total dollar volume topped $1 billion, reaching $1,065,785,348 and increasing 19 percent compared to July 2014.

New listings increased nine percent to 4,133 listings and active listings increased by five percent year-over-year to 7,174 listings, driving inventory levels up to three months for the first time since July 2014. However, Austin-area housing inventory is still well below the 6.5 month level, which the Real Estate Center at Texas A&M University cites as a balanced market.

Pending sales rose eight percent year-over-year to 2,873 listings and homes remained on the market for an average of 41 days, or two days more than July 2014.

Cooper concluded, “Mayor Adler recently called for 100,000 new housing units to be built by 2025 as a first step to untangling the city of Austin’s complicated permit review process and alleviating affordability issues in Austin. The Austin Board of REALTORS® sees this initiative as progress toward a more sustainable Central Texas housing market and will continue to work with city leaders to make Austin an affordable place to call home for all residents.”

July 2015 Statistics

• 3,149 – Single-family homes sold, 12 percent more than July 2014.

• $269,500 – Median price for single-family homes, eight percent more than July 2014.

• $338,452 – Average price for single-family homes, six percent more than July 2014.

• 41 – Average number of days single-family homes spent on the market, two days more than July 2014.

• 4,133 – New single-family home listings on the market, nine percent more than July 2014.

• 7,174 – Active single-family home listings on the market, five percent more than July 2014.

• 2,873 – Pending sales for single-family homes, eight percent more than July 2014.

• 3.0 – Months of inventory* of single-family homes, unchanged compared to July 2014.

• $1,065,785,348 – Total dollar volume of single-family properties sold, 19 percent more than July 2014.

The following sections describe trends in other sectors of the Austin-area real estate market.

Townhouses & Condominiums

The volume of townhouses and condominiums (condos) purchased in the Austin area in July 2015 was 317, a four percent decrease from July 2014. The median price for condos was $224,850, which is 10 percent more than the same month of the prior year. When compared to July 2014, these properties spent 42 days on market, or five more days than July 2014.

Leasing

In July 2015, a total of 2,187 properties were leased in Austin, which is nine percent more than July 2014. The median price for Austin-area home leases was $1,550, three percent higher than in July 2014.

The Austin Board of REALTORS® (ABoR) builds connections through the use of technology, education and advocacy to strengthen the careers of its 11,000 members and improve the lives of Central Texas families. We empower Austin REALTORS® to connect their clients to the region’s most complete, accurate and up-to-date listings data. For more, contact the ABoR Department of Public Affairs at

marketing@abor.com or 512-454-7636. For the latest local housing market listings, visit AustinHomeSearch.com.

* The inventory of homes for a market can be measured in months, which is defined as the number of active listings divided by the average sales per month of the prior 12 months. The Real Estate Center at Texas A&M University cites that 6.5 months of inventory represents a market in which supply and demand for homes is balanced.

The last few years I have observed a number of trends that I can only attribute to what is known as the HGTV Effect.  The power of television is certainly changing the way people see real estate. HGTV has influenced viewers in ways that printed media never could. The results are clear in a number of ways.

First, it is cool to be a landlord again.  If you doubt it, check out CraigsList.com.  I cannot remember a time when so many individuals were managing their own properties.  This is also evidenced by the burgeoning short-term rental market, which is very much dominated by an entirely new variety of landlord.

The second result of the HGTV Effect is apparent in what I refer to as the dumpster craze.  In my neighborhood, we currently have at least four homes with roll-off dumpsters in front of them . . . and several storage Pods. In the not too distant past, most homeowners thought of remodeling as painting their stained cabinets white and installing wood or tile floors.  I now refer to that as a phase one update.  Now that HGTV has shown Americans that remodeling and or flipping can be fun and profitable, at least on “reality” TV, everyone seems to want in the game.

This recent, overwhelming urge to remodel and update has been a boon to small builders.  When I was building in the early seventies to the early 90s, most homebuilders avoided remodeling, instead preferring to stick to new construction.  Now small builders have a very difficult time competing for lots with the big national firms and they have warmed up to the large, more profitable complete make-overs.

The third way that the HGTV Effect is evident is obvious when marketing dated homes.  We now see that homes either need to be old enough that they are prized for their well-preserved condition (Mid-century is trendy), or they need to be largely updated and well maintained.  Houses which still look as they did when built in the 80s are being heavily discounted by buyers – if considered at all.  Many buyers are looking for dated, solid, well-located homes to remodel; but they will only consider those houses at a heavily discounted price.  The question then becomes, do homeowners need to launch into a major remodel before marketing their home, or do they just discount it for the work that needs to be done?  That is the biggest question that owners face today.  In truth, very few homeowners have the skills needed to profitable do a massive remodel.  Having done it for many years, I can say that the TV shows make it look more appealing than it usually is.

Jeff Stewart, CCIM, SRES

jstewart@stanberry.com

Stanberry & Associates, REALTORS

An interesting issue has cropped up with properties within the city limits of Austin and it raises some very important questions.  The City of Austin now has a public accessible website that lists all the expired building permits issued for properties inside the city.  Expired permits are permits that were correctly issued, but for whatever reason were never given final approval for the building department.  In my experience, most of the open (opposed to “final” or “closed”) permits are due to contractors who took final payment and left the owner with the understanding that everything was completed and City approved.  Water heaters and air conditioning systems are perfect examples of many of the open permits I have seen.  The City of Austin will not issue a new building permit for a property if it is found to have expired permits.

Many of the expired permits are easily corrected.  In some cases the inspections were done, but for some reason the paperwork did not get filed.  In other cases, getting the City to give final approval can be a true nightmare.  In my case, my home had two expired permits . . . one for HVAC and one for a slab repair.  Both were done decades ago. In the case of the HVAC, the City had given us a rebate so it was clear that they had approved it.  In the case of the slab repair, they wanted a copy of the final engineer’s report . . . which I had.  Both instances were easily corrected.  Many others have not been so lucky. An example of a difficult permit to final out is swimming pools.  Codes have changed through the years and inspectors may require more changes for safety. It has been my experience that the homeowner is at the mercy of the inspector.  Some have pet peeves and are very inflexible.  Others are more agreeable and allow the owners to comply with the codes as they were when the permit was first issued.

So this brings up the question: Does a homeowner want to know whether permits are still open or not?  Does a real estate professional have a duty to determine if a property has open permits before placing it on the market?  Should TREC approved inspectors check the website for permit infractions and make it part of their inspection report? Changing technologies keep improving our access to more and more information.  Do these changes alter the duties of agents and sellers as to full disclosure? It is debatable.

Some agents I know believe that it does the seller an injustice to make the effort to learn about any possible open permits. They subscribe to the ignorance is bliss theory.  I argue that failing to explore this easily discovered information leaves the agent and their seller/client potentially liable to a subsequent buyer who discovers they cannot take out a remodeling permit because of earlier uninspected work.  I have seen this repeatedly the last couple of years.  When the information was difficult to discover, not disclosing open permits was probably forgivable. Now, checking for expired permits takes almost exactly the same number of mouse clicks as verifying the flood plain on a property . . . a normal part of our usual due diligence.

Finally, I would urge every owner to check out the status of their properties.  Years ago, these types of issues tended to cure themselves with time.  Now it is exactly the opposite.  Waiting to correct these problems only makes it worse – companies go out of business, paperwork gets lost, key players grow old or die, codes change.  To check for open permits, go the austintexas.gov .  Click on: Development > Permits> Expired permits> Check a property> information services.  One helpful hint, the dates at the bottom of the search criteria much be changed from the default.

Jeff Stewart, CCIM, SRES

Stanberry & Associates, Realtors

jstewart@stanberry.com