Last month I posted an update looking at Austin MLS transactions and how the pandemic was impacting the real estate market here. At that time I noted that, due to the lag between homes going under contract and actually selling, we had not yet seen the full impact show up in sales numbers.
Last week, WK 17, which I am defining as the dates 4/19-4/25, is 4 weeks after WK 13, which is the week that shelter in place guidelines were issued in Austin and large parts of the economy shut down. So WK 17 seems reasonable to expect will see a steeper decline in transactions due to much reduced home search activity in the second half of March.
- March finished the month down about -3% vs. March 2019
- WK 17 was down roughly -40% vs. WK 17 in 2019
- April is on track to finish down around -25% vs. April 2019
- Year to date, transactions are down roughly -6% vs. the same time in 2019
The luxury market has been a bit more resilient; slower to show the impact of the slowdown, and not as steep a drop-off once the quarantine started.
Luxury market (750K+ price points) observations:
- The luxury market YTD is actually still up (~7%) vs. 2019
- January was up 17%, February up 34%, and March up 15% compared to the same months in 2019
- April finally shows the impact, with transactions on pace to finish the month -23% vs. April 2019
Non-luxury transactions (<750K) observations:
- The non-luxury market YTD is down roughly -8% vs. 2019
- While January was up 6%, February was roughly flat and March was down -6%
- April is on pace to be down -27%
But in the same way that there are multiple factors at play in the Texas economy (plunging oil prices), there are also other factors in Austin. Affordability and adequate inventory in Austin real estate have been hot topics for a while now and may also be contributing to the down performance, as well as the low interest rates.
- Affordability: Through March, average monthly listings have been down roughly -30% vs. the same months of 2019. The drop in non-luxury listings is much steeper, even before the pandemic. For example, in January and February of 2020, active listings priced under 750K were down -40% vs. the same months of 2019.
- Interest Rates: While I don’t have metrics for this factor, I know anecdotally that the lower interest rates has led to a flood of refinancing, which slowed everything down and led to some, perjaps many, transactions being delayed.
But here is some good news… the difference between pending sales this year vs. last year, while down dramatically earlier this month, has gradually crept back up each week, indicating that buyers are still finding a way to look, and homes are still going under contract.