Flat home sales last month lowered the temperature a bit in Central Texas’ long-hot housing market, according to new data from the Austin Board of Realtors. But the 0.9 percent sales decline for the month doesn’t mean the market has lost its steam, the board said in its latest monthly report. The board said 2,368 homes changed hands in September, down 0.9 percent compared with September 2017. Year to date, the board said home sales in the Austin-Round Rock region are up 3.6 percent from the first nine months of 2017. “Austin-area housing market activity has bucked the trend of a cool-weather slowdown over the last several years, maintaining much of the momentum from the summer months through the end of the year,” Steve Crorey, president of the Austin Board of Realtors, said in a written statement. “Home sales growth declined 5 percent last September, so it’s good to see that the area housing market held steady in September 2018. Austin continues to be one of the fastest-growing markets and most competitive housing markets in the country.” The metro area’s median sales price rose to $302,250 — a 4.2 percent increase year-over-year, and the highest median home price on record for any September, the board said. It also was the first time the median price topped $300,000 for any September on record, the board said. Within Austin’s city limits, sales also were down by 0.9 percent. Half of the 702 houses that sold within the city of Austin went for $365,000 and half for less, for a 3.3 percent increase in the median price. September marked just second time this year — June being the other month — that sales fell year-over-year, both within Austin’s city limits and across the entire metro area. The board’s report tracks the five-county Austin region stretching from Georgetown to San Marcos. “I don’t consider one month’s data sufficient to establish a trend,” local housing market consultant Eldon Rude said of September’s sales dip. “The reality is the volume of annual home sales has increased for nearly eight years, and it’s possible closings have peaked this cycle. But I don’t think measured increases in interest rates or home price increases will stymie the market if the local economy continues to create jobs at the same pace we have seen in recent years.” Local real estate agents have differing takes on the market, with some reporting slower sales and others saying it’s as strong as ever. “It seems like it has kind of slowed down,” said Wende Parks, a broker associate with Moreland Properties in Austin. “In a normal market, we would typically see a pickup after Labor Day weekend, after school starts. We didn’t seem to get that pickup. Things are still moving, especially in the luxury market, but I have found recently that the showings have slowed.” Carol Dochen, a local real estate broker, said she agrees with Parks “100 percent.” “Typically, if someone is going to put their house on the market midsummer, I would advise them to wait until Sept. 15, because that’s when we see a pickup — from Sept. 15 to Nov. 15,” said Dochen, who owns Dochen Realtors in Austin. “But it’s seeming slower than a normal season.” Parks said factors influencing the market could include the upcoming midterm elections, uncertainty over the stock market and rising mortgage interest rates, which are pushing up against 5 percent on a 30-year fixed loan. “Buyers are still there, but everybody is just kind of waiting to see what happens before they make decisions,” Parks said. Other factors affecting the market include lack of affordability and low inventory, said Gay Puckett, a broker associate in Austin with JB Goodwin Realtors. “You’ve got young people who can’t get afford the housing because prices are going up,” Puckett said. “But for those who do want to jump in, there’s just not much to choose from. If buyers can’t find what they want, they’ll decide to wait.” However, Roxan Coffman, owner of Roxan Coffman Properties in Clarksville, while agreeing that a lack of inventory continues to be an issue, said: “Any discussion of slowing of the market is not true.” “Home sales continue to be at a record pace this year,” Coffman said. “With continued job growth, the market should remain strong.” But Dochen said some buyers she is working with, “perceiving the heat is out of the market,” are taking a wait-and-see approach. “They’re looking, but they’re not in a rush,” Dochen said. “They don’t feel that they have to pounce right now. Their opinion is that prices are going to come down.” Last month’s sales dip could be due to rising interest rates, Lawrence Yun, chief economist and senior vice president of research at the National Association of Realtors, said in a written statement. “Higher interest rates have cut affordability and are holding back home sales,” Yun said. “But steady growth in jobs and income will boost housing demand over time. Increasing housing supply as reflected in higher housing permits will also help slow home price growth and help consumers.” Charlie Cooper, owner and president of Austin Capital Mortgage, said that, based on his firm’s average loan of $250,000, a full percentage point increase in rates, from 4 percent to 5 percent, increases the principal and interest payment from $1,194 to $1,342 —an increase of roughly $150 per month. Couple those increased payments with the fact that home prices have gone up nearly 40 percent in Austin in the past five years, “and it’s easy to see why many are finding it harder to buy,” said Rude, principal with Austin-based consulting firm 360 Real Estate Analytics. Although rising rates “definitely make an impact on purchasing power,” Cooper said: “Provided rates don’t jump too sharply, I doubt it’s going to put the brakes on anything in Austin. Because Austin has a strong economy and is such a desirable place to live, we should continue to see strong growth into the future.” Holden Lewis, home expert at NerdWallet, a personal finance website, said he believes rising house prices will have more of an impact on the Austin market than rising interest rates. “With house prices growing so fast, there’s undoubtedly going to be continued pressure on home affordability in Austin,” Lewis said. “Already, of the four biggest metro areas in Texas (Dallas-Fort Worth, Houston and San Antonio being the others), Austin has the least-affordable housing.”

Source: Austin American Statesman