We nerd out this month on the stats for May as we approach the height of the market for the year.
Austin active listings are down year over year by 15.6%, whereas South Austin actives are up 16.9% in the same time frame. Austin inventory is still shrinking overall while South Austin is adding inventory and the Austin numbers include the added inventory in the south, so it's shrinking even faster in the rest of the city to make up for that number.
Austin solds are down year over year by 2.7%, whereas South Austin (South of 71, west of 35) sales are up by 0.9% year over year, this time. We still seeing three fourths of all active homes in South Austin sell in a month, so inventory remains very tight. The median days on market at the time of this writing is 14 days in South Austin up from 8. That is still very short but interesting to see that increase. The extra inventory in South Austin is extending the median days on market, but it is still very fast.
Inventory to buy in Austin is still shrinking compared to last year, South Austin inventory is still increasing which makes it a shiny spot of choice for now. This shows that homes are appreciating in South Austin and people are selling to cash out their equity. And people are still buying more than three out of four homes that are being listed!
Median Sales Price has increased substantially up 7.5% year over year in Austin ($430,000), and the South Austin median sales price is down 0.4% ($365,000)! The shrinking inventory in the rest of the city is causing prices to go up while South Austin prices are flat since there is more supply down here. It won't last forever as eventually the south side will reflect the rest of the city.
We are now ten years out from the housing recession and that sentiment has caught up on a national level. You can't blame people for wanting to stay out of Real Estate during the crash, but even just six years later, over half of Americans still thought home ownership was a good investment. Today that is up to 65%, so people are getting over the burn and starting to come back to it as the markets have stabilized.
Compared to other investment classes, Real Estate is gaining popularity compared to stocks, savings, and gold. Any savings account today is barely going to keep up with inflation. The highest I've seen recently is about 2.5%, so saving cash is almost losing purchasing power. Stocks have gained popularity, and much of that I would argue is in index funds. Real Estate is however getting more popular. It is a timeless investment, especially if you can hold it through down turns.
Like I have said in my previous posts about the economy, most analysts were predicting a strong economy in 2019 and we are continuing to see that. We have the China/US trade deal coming up soon which could shake things up and of course the national presidential election next year, so there are some high tension events coming. It's hard to know exactly how those will play out on the economy, but for now it appears strong. Home purchasing activity that we are seeing in Austin matches that as transaction volume is the same or a little higher than last year.
If the housing market were going to have turned this year, I think we would have seen it by now as the first half of the year is busier than the last half. Rates continue to be low. Inventory in Austin is still very low, and for a significant shift to happen we need to upset supply and demand. The supply still remains very tight in Austin with nowhere to build except on the outskirts. So until that starts to change, Austin is still growing and prices are still appreciating. We will keep a watch on it and continue to give you our opinion on the market.