Real Estate in Austin – Housing Demand Forecast 2018

Sharing is caring!

Experts expect strong finish in 2017 and increased demand in 2018 for the Austin-Area Housing Market

Looking at Real Estate in Austin from both active listings and monthly housing inventory, you see a significant gain throughout the five-county area in 2017, which could indicate strong home sales in the months to come. Active listings jumped 16.9 percent year-over-year to 6,474 listings in the Austin-Round Rock MSA and rose 14.6 percent year-over-year to 1,564 listings within the city of Austin.

This year is expected to be another strong one for Real Estate in AustinTexas housing market.
That was the forecast local expert Eldon Rude delivered to about 700 industry professionals at an annual housing outlook event at the JW Marriott in downtown Austin sponsored by Home Builders Association of Greater Austin and the Austin Board of Realtors.

“What an amazing run we’ve had watching Real Estate in Austin the last four or five or six years,” Rude said. “We’ve had a strong start to the year and I don’t think that will change. The bottom line is we’re going to have a good year, both in the new-home and resale markets.”

Rude is principal of 360 Real Estate Analytics, an Austin-based consulting firm. For almost 17 years prior, he was director of the Central Texas region for Metrostudy, which tracks the housing market nationally and locally.

Central Austin Homes for Sale under 1,500,000


Rude said all but one of the builders he has surveyed had higher sales last year than the previous year, and the one who didn’t had run out of lots.

Single-family sales growth across the Central Texas region is partly being fueled by strong housing development activity, particularly in Williamson County. Last week, Metrostudy reported that annual new home starts through 2017-Q2 are up nearly 15 percent year-over-year, with 14,392 new home starts in 2017-Q1. The top five Austin-area submarkets for home starts – Cedar Park/Leander West, Pflugerville, Kyle/Buda, Hutto and Del Valle – comprised 46 percent of annual home starts during that time frame.

“Real Estate in Austinarea is delivering more lots than ever before, and as a result we’re seeing strong gains in new home starts so far this year, particularly in suburban areas in northeast Travis County and throughout Williamson County,” said Vaike O’Grady, Austin Regional Director for Metrostudy. “Rising development and construction costs as well as regulatory hurdles, however, are impeding growth in some markets, causing some builders to look outward in attempt to meet buyers’ affordability needs.”

At a county level, active listings increased 24.6 percent to 2,056 listings in Williamson County, increased 15.1 percent in Travis County to 3,233 listings, and increased 13.7 percent to 857 listings in Hays County in April 2017.

Monthly housing inventory increased 0.3 months from April 2016 to 2.6 months of inventory in the Austin-Round Rock MSA. Real Estate in Austin housing inventory remains the most constrained throughout the region, increasing 0.2 months during the same time frame to 2.0 months of inventory in April 2017.

Central Austin Homes For Sale under 850k


Home prices posted moderate gains in April 2017. In the Austin-Round Rock MSA, median sales price for single-family homes increased 5.8 percent year-over-year to $305,000. In the city of Austin, median price increased 4.1 percent to $370,600 during the same time frame.

Single-family home prices remain most affordable in Hays and Williamson Counties, but it’s also where home prices are rising the fastest. In April 2017, the median price for single-family homes in Hays County increased 7.1 annually to $267,500, while median price increased 7.0 percent in Williamson County to $275,000.

“Millennials, who make up more than one-third of Austin’s population, are looking for attractive, smaller homes close to amenities and major thoroughfares,” added O’Grady. “Several developers have already proven that communities with smaller homes and lots can be successful in Austin, but it’s increasingly difficult to find areas where this type of product can be built. Our region’s cities need a compromise of vision between preservation and necessary change in development in order to meet the demand for affordable new homes.”

Although the region’s job growth has slowed to an annual rate of about 2 percent (19,500 jobs) in late 2016 from a rate of over 4 percent (about 40,000 jobs) for several years prior, “I don’t think that will dent demand for housing,” Rude said. He said pent-up demand coupled with strong consumer confidence should keep the market healthy.

“We’re at confidence levels we haven’t seen Real Estate in Austin like this since 2003, 2004, 2005,” Rude said. “Job growth is the engine that drives housing demand and consumer confidence is the gasoline.”

Any impact on the market from rising mortgage interest rates will be tied to both how much they go up, and how quickly, said Rude.

“Although interest rates are always an important factor for homebuyers, history has shown that if the job market is good, wages are increasing and home prices are going up, people will continue to purchase homes. It’s all about confidence.”



This week, the Austin Board of Realtors said the median home-sale price in the Austin-area hit a calendar-year record of $284,000, up 7.2 percent over 2016’s median.

Rude predicts builders this year will start construction on 14,000 to 14,500 homes — or 5 percent to 8 percent more than last year’s level. He thinks most of the growth will be in the lower price ranges, below $300,000, but projects another strong year for the higher-price points as well — over $750,000 — due to consumer confidence in the national economy.

With a continued low supply of available houses compared to demand, home prices are expected to keep rising this year, Rude said. He said the region has had a housing supply of less than four months for more than four years. Experts consider a supply of 6.5 months to indicate a balanced market, tipped in favor of neither buyers or sellers.

Another speaker, economist Greg Hallman, forecasted “continued healthy job growth and Real Estate in Austin and Texas, where we are on a serious roll.”

Hallman, senior lecturer of real estate finance at the University of Texas at Austinexas has seen a 25 percent rise in employment since 2006 compared to its nearest competitor, New York, where job growth has been just over 10 percent during that time.

Nationally, the U.S. economy “is in very good shape,” Hallman said, based on the usual metrics to gauge its performance, including GDP growth, employment, wage growth and consumer confidence.

“I expect continued growth for Real Estate in Austin in the near-term for the U.S. and Texas,” he said.

However, Hallman said “all bets are off” for his positive outlook if incoming President Donald Trump’s policy proposals are enacted.

Like Us On Facebook

Talk to an Agent Today



Central Austin Homes

Sharing is caring!

Go Top