Last month I updated you on 2020 activity in the Austin metro residential real estate market, emphasizing extreme under-supply and price escalation issues (Sitting down? More on Austin home prices). In January we again sold more homes than were added to our supply, but prices actually dipped slightly compared to December. Here’s the big picture, showing listing inventory (houses, condominiums, and townhouses), unit sales , and months’ supply:
Notice that unit sales (blue line) were higher than listing inventory (orange line) from September 2020 through January 2021, and that months’ supply (green dotted line) reached an all-time low in January. Look at the difference just one year made: In January 2020, we had 5,333 listings and sold 2,033 homes. In January 2021, we had 1,369 listings and sold 2,523 homes. Year over year, unit sales increased 24% while listing inventory decreased by 74%!!! January 2021 listing inventory represented just 0.4 month’s supply — about 12 days!
This environment creates significant upward pressure on prices, driven by multiple offer situations, cash sales, and appraisal waivers:
From January 2020 to January 2021, the average home price in the Austin metropolitan area increased 24%, from $371,298 to $460,441, and the median moved from $305,000 to $365,000, up 20%.
It is worth noting that we still see price reductions and expired listings, even in this market. As I write this, there are just under 1,000 active listings in our 5-county region. They have been on the market from 0 to 1,654 days, with a median of 25 days and an average of 75 days. In January there were 75 listings that expired after an average of 73 days on the market. Price versus Value still matters, and it is entirely possible to overprice and/or under-prepare a home for sale, even now, and that was apparently true of about 1 out of 14 listings last month..
In the first chart above you’ll see that unit sales (blue line) in January were down compared to December. Some of that may well be seasonality, but it’s also likely affected by the quality of our dwindling inventory. The average sale price in January declined about 5% and the median price was essentially flat. One month does not make a trend, but any pause at all right now is worth identifying and watching. What we need is more homes to sell and we’re about to enter the season when we typically add new listings, and most home sellers who enter the market can expect to be well rewarded. Of course, many will also need to be buyers in a challenging market which requires careful planning and coordination, but we have been working with that for years. I’ll have more updates for you as we move toward the traditional Spring-Summer selling season.