Austin housing most expensive in Texas?

The Austin Business Journal reported yesterday that:

Austin beats all Texas markets but this time, it’s not such a good thing

The article says that the average list price for a 4-bedroom, 2-bath home in Austin is much higher that other cities in Texas.  I have not seen the detailed data, but I am confident that statement is true.  Actual sale prices are more useful to me than what sellers are asking for their homes, but before I get to that information I’ll just comment quickly on list prices:

• We have been in a very fast-moving market this year, encouraging sellers to price their homes higher than they might in a more competitive environment.  For many that has been a successful strategy.  Others have reached too far.
• The average list price in the 5-county Austin metro area today is $519,054 — more than 80% higher than the average sale price in the past three months, $284,065.
• The average time on market for today’s active listing inventory:  85 days.  Average time for those that sold:  39 days.  (Medians:  60 days for active listings; 19 days for sold listings.)

I have not done detailed analysis of the 4-bedroom, 2-bath inventory, but this broad market data and my personal observations from working day-to-day in the market, indicate that averaging list prices necessarily includes “dead” inventory — homes that will not sell as priced, even in our go-go market.

Now, it is a fact that Austin has been relatively higher priced among major Texas cities for a number of years, and our hyper-growth in the past 12 to 18 months has exacerbated that situation.  That’s just the law of supply-and-demand in action.  In 2011, 53.1% of Austin metro home sales were under $200,000.  So far in 2013, that figure is 42.9%.

Yes, tremendous demand in a significantly under-supplied market has pushed prices up, and Austin’s average sale price this year is the highest in the state:

We passed South Padre Island and Collin County in the past year, driven by an 11% increase in average sale price.  Scan down the % Change columns and you’ll see supply-and-demand impacting some other areas in a much bigger way.  Being in the upper tier of Texas home values is not new for Austin.

On the other hand, median sale prices are a little more encouraging:

On this basis, Austin is 5th in the state, with 50% of this month’s sales below $223,700.  (4th YTD with a median price of $222,800.)

I’ll discuss price distribution in our market in a separate post.  For now I just wanted to put our reported “highest in the state” position.  I will also explore the Housing Affordability Index separately, and the Austin Business Journal plans a piece on housing affordability as well.

It is worth noting that the City of Austin has made significant investments in affordable housing in recent years, and voters approved another $65,000,000 for that purpose on November 5. For most purposes, growth and prosperity are good news, but demand outpacing supply makes keeping the least expensive stock available a real challenge.  More to come on this ….