The City of Austin’s residential real estate market is still active despite the city’s Shelter at Home mandate. Real estate services including residential services and construction have been deemed “essential”, and while it is not business as usual, we are still actively working with buyers, sellers, and investors. In person showings are very limited, require careful coordination, and are generally discouraged at this time. However, we have been utilizing video tours and arranging in-person viewings during the inspection period once a property is under contract. We are also closing transactions using online notaries and remote signings. Some sellers have chosen to wait until after the shelter at home directive is lifted to go on the market, especially owner-occupied properties.
Interest Rates in the Austin Real Estate Market
Interest rates continue to be at historical lows with today’s rate being around 3.25% for a 30-year conventional mortgage. 15-year rates can be even lower. We have seen some non-traditional lenders withdraw from the market during this time including some jumbo loan providers. If you are considering using a mortgage to purchase your next property, it is a great time to lock in these low rates. It is also a great time to refinance if you have not done so yet.
Long Term Impact of Shelter at Home on the Austin Housing Market
The long term effects of the current shelter at home and social distancing directives are yet to be determined. If we are able to return to some degree of normalcy within the next 30 to 60 days, I anticipate a pent-up buyer demand will continue to drive home prices up as we are still faced with an inventory shortage. The buyers that are pro-active now may be able to avoid an increased wave of competition from other buyers. Sellers who do not wish to list their home now can use this time to prepare for going on the market by addressing deferred maintenance, landscaping, de-cluttering, and preparing for their move.
Austin Real Estate Data
The data below compares January through March 2019 to January through March 2020. We have less homes active on the market in 2020 that we did during the same period in 2019. However, new listings are in line with, if not greater than, 2019 and sold properties are nearly identical to 2019. With less homes overall on the market and nearly the same number of new and sold homes each month, our inventory continues to go down, driving prices up. March 2020 showed an increase of 2% in new listings going on the market with 29% less active listings and only a 5% decline in sold listings. February had 8% more sold listings than in 2019. The median days on market in Austin are down across the board for all three months, demonstrating the continued competition among buyers.
The Austin real estate market and the rest of Texas stand to withstand any recession or downturn better than many other markets in the country. Our robust economy, highly educated workforce, cost of living, and attractive tax policies will continue to draw major employers to Austin. For those looking for a less volatile investment than the financial markets, Austin real estate continues to be a great alternative to the financial markets.
This article has been contributed by David Bain, an Austin, TX real estate agent with Bain Residential.