Housing supply surges in Austin region at midyear as sales, median price tumble

A surge in housing supply marked the first half of 2024, a midyear check of the Central Texas market shows.

Slower home sales and a decline in median closing prices reflected the ongoing cooling trend in the housing sector since mortgage rates began climbing in 2022, halting the post-pandemic market frenzy characterized by bidding wars, often well above sellers' asking prices.

In June, the number of homes for sale in the Austin area shot up almost 26%, to 13,227 active listings, according to the latest report from the Austin Board of Realtors. The report, released Friday, covers both the month of June and the first half of the year in the Austin region, a five-county area that extends from Georgetown to San Marcos.

From January through June, the number of active listings jumped 15.5% in the region as a whole compared with the same period last year, the board said.

June's monthly increase in listings, coupled with the rise in mortgage rates in late April and early May to 7.2%, spurred a 6.3% decline in the region's median home-sales price, the board said. The median was $450,000, meaning half of the homes that changed hands went for more than that amount and half sold for less.

More: Check out what's up — and down — with home sales, prices, supply in Austin area market

The jump in listings provided buyers with a five months' supply of homes from which to choose, the highest level of inventory since 2011, the board said. Five months would be the time it would take to exhaust the available inventory at the current sales pace. Experts consider a supply of six months to 6½ months a balanced market, in which neither buyers nor sellers have the upper hand.

Sales, median price decline

“In June, and the first half of the year, we’ve seen sellers remain resolute in their price point," Clare Knapp, housing economist for the Austin Board of Realtors, said in a statement. And that resolve by sellers was a key factor behind June's 13.4% year-over-year decline in sales in the Austin-Round Rock region, where 2,732 homes change hands.

Across the region, 15,189 sales closed in the first six months of this year, down 1.8% from the same period last year, the board said.

Within Austin's city limits, buyers closed on 5,172 sales through the first half of this year, down about 3% from the first half of 2023. The median sold price was flat, at $574,995.

For the month of June, 868 homes sold in the city limits, 21% fewer than in June 2023. Half of those homes sold for more than $600,000 and half for less, for a 1.6% decline in the median closing price.

The city of Austin had 5,632 homes for sale in June, 43.4% more listings than the prior June.

"For buyers, the recent surge in active listings, plus affordability constraints for moderate-income buyers, means that they are choosing to be more selective when purchasing a home," Knapp said. "The market will continue to find its footing in the latter half of the year, proving that both buyers and sellers will need to remain nimble and work closely with their (real estate agent) to find and negotiate their best option.”

Increased supply: Who benefits?

Ben Caballero, founder and CEO of Dallas-based HomesUSA.com, tracks the new-home market in Texas, including the Austin region.

In his latest report, released last month, Caballero said that although sales of newly built homes in the Austin area ticked up 4.1% in May over April, his latest data is dimming the sales outlook for the rest of the year as the supply of new homes continues to mount.

He cited concerns about both pending sales and active listings.

In the Austin region, pending sales of new homes — an indicator of future sales — were flat in May over April, Caballero said. In addition, listings of new homes increased almost 9% year-over-year in May as builders struggled to move inventory in the face of higher mortgage interest rates, Caballero said.

More: New home sales up in Austin region in May, but outlook for the year dims

For years, real estate industry experts, agents and others have said more inventory is needed to keep up with the region's job and population growth. A shortage of supply, they said, has led to sharply rising home prices in recent years and to affordability concerns.

So isn't it a plus that supply is increasing?

In an email, Caballero said: "Increased supply is good for consumers who can pay cash. Buyers needing to finance suffer from an affordability issue. Eighteen months ago, interest rates were about half what they are now. As interest rates escalated, demand dwindled, causing inventory to increase. Sellers have more homes competing for the available buyers. When increased inventory is due to lack of affordability, both buyers and sellers suffer."

Market is 'exceptionally challenging'

Last month, Keith Trigaci, an agent with the real estate brokerage Compass, said that across most price points in Austin right now, "the current market is exceptionally challenging, and even industry experts find it difficult to predict trends."

"High interest rates have significantly reduced buyer activity at open houses, in-person showings and calls on listings," Trigaci said. "Many properties that failed to sell last year remain on the market, with sellers hoping for better conditions."

Experts have said the local housing market continues to stabilize after a period of unsustainable growth.

"After several years of demand far exceeding supply, which resulted in huge increases in home prices, the Austin housing market is now in a correction phase," Eldon Rude, a longtime housing market expert, said last month.

More: Austin-area housing outlook positive; job growth, slower home prices pluses, expert says

"Although there are numerous reasons for the shift in the market, the most significant include sharply higher interest rates, and the slowdown of in-migration of new residents into the area in recent months ... tied to tech companies' slower pace of hiring," Rude said in June. And that means there are fewer relocation buyers in the market, who generally purchase move-up and luxury housing, he said.

As for advice, Kent Redding, president of the Austin Board of Realtors, said the homes that are selling are moving because they are showing well and priced appropriately.

"Price and presentation are the top two critical components to a successful sale, whereas time on the market can be a big detractor. For buyers, now is the time to expand your options and make competitive offers in this high-inventory environment," Redding said.

Elsewhere across the region

Along with the figures for the Austin-Round Rock area and the city of Austin, here's how sales, median prices and listings stacked up by county, for both June and the first half of 2024, according to the Austin Board of Realtors:

Travis County (June)

● Sales: 1,210, down 18.6% from June 2023

● Median price: $525,000, down 3.7%

● Active listings: 6,819, up 29.9%

Travis County (year-to-date)

● Sales: 6,830, down 4.8% from the first half of 2023

● Median price: $520,000, up 0.1%

● Active listings: 31,533, up 21.4%

Williamson County (June)

● Sales: 945, down 15.1% from June 2023

● Median price: $434,000, down 3.6%

● Active listings: 3,727, up 23.0%

Williamson County (year-to-date)

● Sales: 5,254, down 3.9% from the first half of 2023

● Median price: $430,000, down 1.6%

• Active listings: 17,613, up 5.7%

Hays County (June)

● Sales: 413, up 1.7% from June 2023

● Median price: $391,775, down 7.8%

● Active listings: 1,908, up 20.4%

Hays County (year to-date)

● Sales: 2,202, up 5.7% from the first half of 2023

● Median price: $385,000, down 3.8%

● Active listings: 9,703, up 16.2%

Bastrop County (June)

● Sales: 111, up 1.5% from June 2023

● Median price: $339,450,  down 10.7%

● Active listings: 633, up  23.9%

Bastrop County (year-to-date)

● Sales: 661, up 12% from the first half of 2023

● Median price: $360,000, down 5.2%

● Active listings: 3,295, up 12.4%

Caldwell County (June)

● Sales: 57, up 45% from June 2023

● Median price: $300,000, up 7.1%

● Active listings: 138, up 8.1%

Caldwell County (year-to-date)

● Sales: 242, up 60.3% from the first half of 2023

● Median price: $299,94, flat

● Active listings: 861, up 36.2%

This article originally appeared on Austin American-Statesman: Housing supply surges in Austin region at midyear as sales, median price tumble