Austin’s housing inventory fell steeply in 2019 after shattering sales records, report says. The steep inventory drop resulted from a record amount of home sales in 2019, despite a critical shortage of homes.
New data from Zillow Group Inc. shows the housing inventory for the Austin metro area fell 15.6%, according to a report from the Austin Business Journal (ABJ).
The inventory drop resulted in 1,510 fewer homes for sale at the end of 2019 than when the year began, ABJ reported.
According to Zillow, the drop ranked as the ninth-largest margin among the country’s 35 largest metro areas.
Here is a list of the only metros which had a steeper decline in housing inventory:
- San Diego
- San Jose
- Los Angeles
“Demand for housing reached new heights in 2019, and buyers ate through much of the standing inventory,” Vaike O’Grady, Austin regional director at MetroStudy, told ABJ.
The steep inventory drop resulted from a record amount of home sales in 2019, despite a critical shortage of homes. ABJ reported 33,084 homes were sold in the Austin metro, up roughly 7% from 2018, according to ABOR data. The area also had nearly $13.2 billion in sales volume in 2019, another record and a jump of nearly 11% from the prior year.
However, despite the record amount of sales, ABOR told ABJ the housing inventory inside Austin city limits was only 0.9 months in December 2019. In the Austin metro, inventory fell to 1.7 months, the lowest on record, according to ABJ.
For context, housing inventory refers to how long it would take to sell all of the homes on the market if new listings stopped.
ABJ reported that a balanced housing market is typically 6.5 months of inventory, according to the Real Estate Center at Texas A&M University.
“It’s crazy to think that we’d be sold out of homes in Austin within two months without any new supply,” O’Grady said. “Austin is one of the few markets in the country in which median new home prices are lower than the median resale price. That’s because development is moving further out, and builders are offering smaller homes on smaller lots. Buyers are snapping them up, and we’re seeing record levels of new home sales.”
Zillow has also declared Austin as one of the nation’s top-trending housing markets in 2020, according to a survey conducted by 110 economists and real estate experts. The survey concluded that 83% of the expected home values surveyed in Austin will grow faster than the 2.8% national average.
U.S. home values grew 3.7% in 2019 to $244,054, down from 3.8% year-over-year growth last month, ABJ reported. According to Zillow data, the median home price in the Austin-area also increased 3.7% in 2017 to $333,380.
Austin is also the least affordable major U.S. city for minimum wage employees, according to a study KVUE reported on. The study said Austin’s median rent is $1,220 per month, while the city’s minimum wage stands at $7.25 per hour. Magnify Money said that means that the median rent is equal to 143% of the take-home pay of minimum wage workers and that someone would have to work 200 hours a month to afford it.