Austin Market Update 1st Quarter 2016
Welcome to our Austin market update 1st quarter 2016. We track the real estate market and watch for trends that are taking place. By watching for trends, we can see the market direction beginning to change before it is well known, and share that information with our clients and visitors.
Job Growth in Austin
Of course, we all know that Austin has had steady job growth. That’s been in the newspapers quite a bit. Austin has been in the top 10% of cities for job growth in the last 10 years. Currently Austin is the 3rd fasted growing metro area in the country, just under Portland and San Jose. And, some late breaking news: Austin was just named by Forbes as American’s top city of the future! To quote Forbes, ” The clear star of the show is No. 1 ranked Austin, which has become the nation’s supurlative economy over the past decade.” Forbes points to our growing population of “young, educated Millennials and households with children” inAustin.
And, it’s true – demographics have been very good for Austin. The workforce is young and motivated. This draws companies to locate here. We have the festivals and music scene – the keep Austin Weird Culture . The combination of art, music, and tech innovation is something that people want to be a part of – and that draws people here. And, our weather is pretty good.
Jobs grew by about 33,500 in 2015. They are expected to grow about the same number in 2016. 20% of our job growth is in the tech industry, which are good paying jobs. The average tech job pays about $92,000 per year.
Shortage of Supply
This has a direct effect on our real estate market. Newcomers need homes, and there is a shortage in the supply of homes. We are expected to need about 28,000 new homes in 2016. We expect to have about 12,500 new homes and 11,000 new multi-family homes coming online in 2016. That leave a shortage of about 4,500 homes.
The underlying reason for the shortage of homes is the shortage of lots in the pipeline for new homes. Central and close-in suburban parts of Austin are substantially built out. We are seeing a lot of tear downs and updating of existing homes in central areas. The remodeling trend has moved our older housing stock toward more modern styles, with open plans, lighter finishes, and more indoor-outdoor spaces.
Months of Inventory
Our median home price grew about 7% in 2015, and we expect about the same growth in 2016.
The relationship between supply and demand for homes is a key indiator of our real estate market. About 6 months of inventory is considered a balanced market. According to the ABOR data for single family homes: We ended 2015 with about 2.6 months of inventory on the market. Now, at the end of 1st quarter 2016, inventory has dropped a little more. We are down to about 2 months inventory. So we are at about 1/3 inventory needed for a balanced market.
We decided to look closer at inventory levels by certain geographic section of Austin. On this page you can see the months of inventory by area, and we have included a map to show you the areas. In these central and close in suburban neighborhoods, we can see that homes under $800,000 actually have less than 2 months of inventory on the market.
This is the lowest inventory level that we have seen in 30 years of working in the Austin real estate market. As long as we’ve been in business in Austin, this is the tightest market we have seen. Our idea of a pretty tight market was about 3 months of inventory. It is half that in many places.
Call Us to Sell or Buy a Home in Austin
If you need to sell a home in Austin, this is a great time to do it. We’d love to hear from you, and get together to discuss how to proceed.
If your looking for a home in Austin, you will find out quickly that you need a good agent to help you get to the property quickly, do quick market analysis to check the price, and work with you to produce the best offer that you feel comfortable making. Well written contracts that are supported by additional information about you, mortgage qualification, and creative concessions may be necessary to win in multiple offer situations.
Thanks for visiting our Austin market update 1st quarter 2016. We hope you will come back to our service oriented website often!
Months of Inventory by Area
Westlake
Under 800,000 – 1.71
Over 800,000 – 8.27
Central
Under 800,000 – 1.95
Over 800,000 – 6.23
Northwest
Under 800,000 – 1.07
Over 800,000 – na
Central East
Under 800,000 – 1.97
Over 800,000 – na
River North
Under 800,000 – 2.42
Over 800,000 – 7.17
South
Under 800,000 – 1.22
Over 800,000 – 6.29
Southwest
Under 800,000 – 1.49
Over 800,000 – 10.42
Southeast
Under 800,000 – 1.86
Over 800,000 – na
Lake Travis South
Under 800,000 – 3.57
Over 800,000 – 15.13
North
Under 800,000 – .72
Over 800,000 – na
Northeast
Under 800,000 – 1.15
Over 800,000 – na
Round Rock
Under 800,000 – 1.38
Over 800,000 – na
Cedar Park
Under 800,000 – 1.77
Over 800,000 – na
Pflugerville
Under 800,000 – 1.36
Over 800,000 – na
*Months of inventory is calculated as follows: The number of homes sold over the past year is divided by 12 months. This is the monthly sales rate. The sales rate is then divided into the number of homes available to be sold. The result is the “months of inventory” on the market. This is a key indication of the market. About 6.5 months of inventory is a balanced market. The map below shows the geographic areas used in our Austin market update 1st quarter 2016.
Austin Area Map
If you’d like to own a piece of increasingly valuable Austin real estate, give us a call! We have over 30 years experience in Austin real estate and would love to hear from you! Thanks for visiting our Austin Market Update 1st Quarter 2016.
