The greater Austin area posted record-breaking gains in May, as the median home price reached an all-time high—for any month on record—of $465,000, while both home sales and sales dollar volume skyrocketed, according to The Austin Board of REALTORS® May 2021 Central Texas Housing Report.
“Austin’s housing market has become one of the most competitive markets in the U.S.,” Susan Horton, 2021 ABoR President, said. “As new companies relocate to Austin and the city’s popularity draws in new residents, the sheer demand for housing has created a critical inventory shortage, reinforcing that affordability and accessibility to housing across our region is a real concern and should be a top priority for local leaders.”
Residential home sales in the Austin Round-Rock MSA once again hit a record for the month of May, increasing 48% year over year to 3,976 sales, while the median sales price jumped 42.2% year over year to an all-time-high of $465,000. At the same time, sales dollar volume increased 116.2% year over year to $2,355,132,804. Monthly housing inventory dipped 1.5 months to a critically-low 0.5 months of inventory.
This data is being compared to May 2020 numbers, a month in which stay-at-home orders were still in effect due to the COVID-19 pandemic. The pandemic greatly affected the real estate industry, causing an atypical slowdown in transactions—particularly for this time of year—which is part of the traditional selling season.
Nora Linares-Moeller, executive director of HousingWorks Austin, said that even though Austin has been making steady progress, historically, Austin has been slow to expand the development of ownership opportunities that are affordable for all income levels. However, with the region’s exponential growth, Austin’s unaffordability for existing residents is exacerbated and becoming increasingly difficult to control.
“With steadily rising home prices, access to affordable home ownership has become a challenge for many Austin residents, but shrinking inventory, lot and labor shortages, and rising construction costs means it’s not an easy process to get more affordable housing on the market. At this point, Austin does not have a lot of land to build single-family homes in the core, so we have to think about density, where it makes sense, and expanding missing middle housing options and income-restricted affordable units. The solution here is to be strategic about placing lower-priced homes and rentals in all parts of the city and urge our city’s leaders to continue making affordability a priority. Taking action now is imperative.”
In May, active listings dropped 70.9% year over year to 1,739 listings, demonstrating how quickly homes are going under contract. Homes only spent an average of 16 days on market last month across the MSA. During the same period, new listings increased 6.3% to 4,413 listings, while pending sales rose 7.4% to 4,355 listings.
For years, ABoR advocated for an increase of the local homestead exemption. Last week, Austin City Council took steps toward alleviating housing affordability challenges by unanimously passing an increase of the local homestead exemption from 10% to 20%. Horton reaffirmed that addressing affordability is of paramount importance for the organization.
“The Austin Board of REALTORS® applauds Austin City Council for making this sound policy decision to help address housing affordability. ABoR will continue our advocacy efforts with local, state and federal governments while simultaneously working to collaborate within the industry because we need to tackle affordability now in order to avoid a potential crisis. Our members understand the importance of educating all Central Texans across all housing budgets how to navigate the market because homeownership is the best way to create generational wealth.”
“At the same time, the market can seem difficult to navigate to the average consumer, because it is fast paced, and transactions are becoming increasingly complex. This is why it is so important to work with a REALTOR® who understands the market and can help you find a home that fits your needs and your budget.”