Earlier this week I updated my Market Dashboard, providing a detailed look at our ongoing supply-and-demand issues and the resulting impact on market velocity and sale prices (Quarterly update – Austin residential real estate). That post sets the stage for an annual update on the distribution of sales by price range across our metropolitan area. This chart says a lot:
The top half of that table shows the percentage of all home sales in each of the price ranges shown at the left. I have highlighted all of the price ranges that accounted for 10% or more of all sales in each year. Obviously, prices have trended upward for years, but notice the dramatic drop in the ranges from $200,000 to $299,999. In just one year, from 2020 to 2021, those prices fell from 33% to just 12% of sales. Also notice what happened in the price ranges from $400,000 to $749,999 — up from 29% to 46% in the same one year period — and sales above $750,000 doubled last year!
The bottom half of the chart shows the cumulative percentages, added vertically from the top half of the chart, and I have highlighted the price range in each year that included the median price. Just four years ago, that was the $250,000 to $299,999 range, and for the past three years the median price was still below $400,000. In the middle rows of the table you can see that the median price increased 31% in 2021, to $450,000 for the year!
Another significant change for entry-level buyers: In 2020 sales under-$400,000 represented for almost 2/3 of all sales. In 2021, the under-$400,000 market accounted for a little more than 1/3 of sales!
The annualized price distribution for 2021 certainly understates quarterly and monthly sales percentages in the most recent months. We’re still experiencing incredible demand in a vastly under-supplied market drive prices higher and higher.
It’s a great time to sell a home in Austin. The flip-side is that it’s a challenging time to buy. Of course, if you have owned your home for just a few years you may be very surprised by how mucy equity you have, and more cash makes buying easier. Nonethelss, resale listing inventory remains very short and homebuilders, despite their best efforts, are struggling to keep up. I remain optimistic that we will work through this. Rising prices and mortgage interest rates will ultimately moderate demand somewhat. Growth will continue, though, and the high-paying jobs that our region attracts can continue to fuel this difficult market environment. Keep in mind: These issues certainly beat many alternatives in our local and regional economies. I’ll keep you informed.