March sales data is out from ABOR (Austin Board of Realtors) and buyers were very active in gobbling up homes as they hit the market. Both City of Austin and Round Rock saw significant jumps in median sales price over last year, see below. You're going to note Active Listings also jumped, specifically in Round Rock, but I encourage you to keep scrolling and look at how that influx of homes to the market actually looks in the grand scheme of things.
We've been struggling with inventory for years now. 2018-2019 were competitive markets (frequent multiple offer situations), but manageable when you had the right representation as a buyer. Most economist say a balanced market is closer to 6 months of inventory (you've heard me say this many times over). The last year and half we've been struggling to maintain a month of inventory. Meaning if we did not add another property, buyers should absorb all the homes in about 1 month. Thanks Independence Title for the graphs below.
So there was a lot of news last September when inventory had doubled! Yes, doubling the number of homes for sale would normally sound like terrible news...a market correction...but it's really adding some balance to the market. Reducing the frenzy of so many buyers competing over the same property.
There is a lot of noise right now with the sudden increase with interest rates, adding in concern around property tax valuations and if values increase this much will the tax rate go down in the Fall and how much will this add to the cost of ownership? Finally, are we seeing some buyer fatigue or just a temporary pause while people reboot for the next wave this Summer. If we take out 2020, because those numbers buck every trend, peak sales historically crest in June / July. See below.
Keep in mind, sales are recorded once they close and fund, not when they contract. The typical timeline from date of contract till closing is ~30 days, which tells us the most number of homes go under contract May / June, then close around 30 days later. Right now should be an ideal time to sell...we will see how the above factors (rates, taxes and buyer fatigue) impact the Austin market.
Should the Austin inventory double, this will make for great news headlines and clickable articles. Remember a six month supply is what economist consider a balanced market...we only had .5 months of inventory according to the graph above! Even if that goes to a 2.5 - 3 month supply like in 2018-2019, agents could all agree that was still a very healthy / fast paced market.