Summary: The real estate market in Austin, Texas is poised for additional price gains in 2013. Home prices in the metro area are expected to continue rising over the coming months, as they did in 2012. This is partly due to population growth and job gains.
Like most cities in Texas, Austin avoided the severe bubble-and-bust cycle of the last few years. While other housing markets across the country were riding the roller coaster of speculation and depreciation, the major metros in Texas followed a more sustainable path.
As a result, real estate markets in Austin, Dallas, Houston and elsewhere largely avoided the market collapses seen elsewhere in the country.
All of this bodes well for the Austin real estate market in 2013. But before we look forward, let’s take a look back over the last year or so.
Austin Real Estate Performance in 2012
According to Realtor.com, the median list price in the Austin metro area rose 9.73% between January 2012 and January 2013. The total number of homes listed for sale dropped by nearly 19% during the same one-year period. This is no coincidence. Shrinking inventory, along with rising demand for housing, has allowed sellers to justify higher asking prices. This can be seen clearly in the nearly 10% jump in Austin’s median list price.
According to the Austin Board of Realtors (ABoR), January 2013 marked 20 consecutive months of increased home sales in the area. Last month, 1,402 homes were sold in this real estate market, a 33% increase over the same time last year.
Cathy Coneway, the current ABoR chairman, expects this growth to continue throughout 2013. “The Austin real estate market showed steady growth in demand throughout 2012,” she said, “and if the first month of 2013 is any indication, this year looks to be continuing that momentum in a big way.”
The median sales price for this metro area (the price at which properties are actually being sold) rose to $197,900 in January of this year. That marked a 10% increase over the median sales price in January of last year.
Homes appear to be selling faster in the Austin area as well. Last month, the average number of days on market was 71 days, 14 fewer than the same time last year. This sends a clear message to home buyers in 2013: be prepared for stiff competition.
Market Trends for 2013
Given the current conditions within Austin’s real estate market, as well as improving trends within the broader economy, we expect home prices to continue rising in 2013. We also expect to see a further decline in housing inventory across the metro area.
Additionally, low mortgage rates will continue to pull buyers into the market. Yesterday, Freddie Mac announced that the average rate for a 30-year fixed-rate mortgage loan was 3.56%. Many mortgage analysts have predicted the benchmark rate will remain below 4% for the better part of 2013.
The Austin real estate market also benefits from strong job growth and a steady influx of new residents. According to local economist Angelos Angelou, Austin gained more than 65,000 new residents last year. The city also created 26,300 new jobs, pushing the unemployment rate down to 5.3%, well below the national average.
Angelou predicts additional economic growth through 2014. He expects the city to add more than 55,000 jobs over the next couple of years.