Updated: Jan 15, 2020
Kicking off a new decade with a market update in January. We're taking a look at the number of active listings, sold listings, and median price of homes in December compared to November and last year in Austin, and south Austin. As you can see from the stats below, inventory is at exceptionally low levels. For a city with around 1 Million people in it, only 1 in 1,000 homes is for sale! As such we are seeing lots of multiple offer situations and a long line of buyers that can't find a home. Inventory has shrunk year over year by almost 50%, this is more than just the winter doldrums.
Active Homes for Sale : 1173 (-24.5% since last month, -34% since last year)
Sold Homes: 854 (+3.5% since last month, -2.6% since last year)
Median Price: $420,000 (+1.2% since last month, +9% since last year)
Active Homes for Sale : 134 (-38.3% since last month, -48.3% since last year)
Sold Homes: 172 (-9% since last month, No change since last year)
Median Price: $360,000 (+0.3% since last month, +5.9% since last year)
Experts believe that the economy is doing well enough that the possibility of a recession is more likely to happen closer to 2021. There is a 1 in 5 chance of a recession in 2020. Housing looks like it will still be a cornerstone for the US economy in 2020.
Home sales are projected to increase in 2020 according to the National Association of Realtors, Mortgage Banks Association, Frannie Mae, and Freddie Mac. Mortgage rates are expected to remain low at an average of 3.8%, and potentially lower than 3.5%.
The biggest issue the housing market will face in 2020 is inventory shortages. We see in south Austin there is less than one months inventory in stock. Inventory levels could potentially reach a historic low in 2020. An average market should have at least 6 months inventory, nationally we are at 3.7 months inventory. New construction of homes are projected to increase in 2020, to help replenish the low inventory level, but this will not solve the shortage of inventory entirely.
Home prices on average are expected to rise at least another 5% over the next year. Core Logic, Frannie Mae, Z' Report, the National Association of Realtors, Freddie Mac, and the Mortgage Banks Association all predict that home values will increase through 2020. With the shortage of inventory, and the projected increase of home sales in 2020, prices have no where to go but up.
18.) zelmanandassociates.com (paid subscription)
21.) https://blog.firstam.com/economics/will-housing-market-potential-in-2020-exceed-2019 22.) https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers