# Austin Housing Market Report: December 2016, 2016 in Review, and What It Set Up

> The Austin metro median sale price was $290,000 in December 2016, +7.1% year over year, with homes selling in 40 days and 2.2 months of supply. 2016 in Review, and What It Set Up, what the numbers mean if you are buying or selling in Austin.

Mike Vilece · January 15, 2017
Canonical page: https://theaustinlocalgroup.com/blog/austin-housing-market-december-2016/

The 30-year fixed mortgage averaged **4.2%** in December 2016, the highest monthly average in this series so far. Active inventory stood at 4,987 listings, up 5.4% year over year. The share selling above asking was 18%. That made it a seller's market.

## Austin market statistics, December 2016

| Metric | December 2016 |
| --- | --- |
| Median sale price | $290,000 (+7.1% YoY) |
| Median price per sq ft | $139 (+6.3% YoY) |
| Homes sold | 2,281 (+0.2% YoY) |
| New listings | 1,399 |
| Active inventory | 4,987 (+5.4% YoY) |
| Months of supply | 2.2 |
| Median days on market | 40 |
| Sale-to-list ratio | 98.0% |
| Sold above asking | 17.7% |
| Listings with a price cut | 17.3% |
| 30-year fixed rate (avg) | 4.2% |

## 2016 in Review, and What It Set Up

A year that ended with the median single-family sale in the metro at $290,000, up roughly 7% from where it started. Dell Medical School had graduated its first class of new arrivals into the city, the mobility bond had passed, and the tech in-migration that would define the next six years was already underway without a name yet.

## What changed since November 2016

The median was unchanged from November 2016, a 0.0% move. Time on market lengthened by 3 days, to 40. Active inventory shrank by 608 listings, to 4,987. The share of homes selling over asking gained 1.0 points, to 17.7%.

One month is noise. The reason to read it anyway is that direction shows up in inventory and days on market well before it shows up in price, so the months where those two disagree with the headline number are the interesting ones.

## Where this month sits in the cycle

| | December 2016 | November 2016 | December 2015 | Since Oct 2016 |
| --- | --- | --- | --- | --- |
| Median sale price | $290,000 | $290,000 | $270,720 | range $255,626–$295,250 |
| Median days on market | 40 | 37 | 39 | highest since Oct 2016 |
| Active inventory | 4,987 | 5,595 | 4,732 | range 4,660–6,891 |
| Months of supply | 2.2 | 2.7 | 2.1 | range 2.1–3.3 |
| Sold above asking | 18% | 17% | 18% | range 17%–30% |
| 30-year fixed rate | 4.2% | 3.77% | 3.96% | highest since Oct 2016 |

The right-hand column is the range this series has covered since October 2016. No forecast in it, just where December 2016 falls against every month that came before it.

## If you are buying in Austin right now

2.2 months of supply is a seller's market, but not a chaotic one. Good homes priced correctly move in the first weekend; anything still sitting after three weeks has a reason, and finding out what it is before you offer is the whole job.

The average home sold for 98.0% of asking, so roughly 2.0% under list was the normal outcome, not an insulting one.

**The payment math.** At $290,000 with 20% down at 4.2%, principal and interest runs about **$1,135 a month**. Add roughly $483 for property taxes and $193 for insurance and you are near **$1,811 a month** all in. Texas has no state income tax and this is where the state collects instead, budget the tax line from day one, not as an afterthought.

**If you are selling:** you have the leverage, and the mistake available to you is overpricing into it anyway. Homes were selling in 40 days. A listing that sits three weeks in this market has told every agent in town that something is wrong, and you will end up taking less than if you had priced it right on day one.

## Neighborhood in focus

**Hyde Park (78751).** North Loop, North University. Known for craftsman bungalows, established. It fits buyers who want an established neighborhood with long-term value.

The metro numbers above are an average of a very unequal city, Hyde Park does not move in lockstep with Kyle or Leander, and the gap between ZIPs widens in exactly the months the metro looks calm. There is a longer, more honest write-up at [/neighborhoods/hyde-park/](/neighborhoods/hyde-park/), including what is wrong with it.

## On in Austin, December 2016

| When | What | Why it matters to a listing |
| --- | --- | --- |
| Mid to late December | **Armadillo Christmas Bazaar**, Palmer Events Center | Runs to Christmas Eve at the Palmer. Adds to the Zilker-area congestion the Trail of Lights is already causing. |
| Mid-December | **Trail of Lights**, Zilker Park | Roughly two weeks of nightly closures around Zilker. Barton Springs Road and the 78704 approaches are slow every evening it runs. |

## What is coming next

CodeNEXT's first draft in January, and the 85th Legislature convening the same month with property tax reform on the agenda. For homeowners: the homestead exemption filing deadline is April 30, and it is free money that a surprising number of new Austin buyers never claim.

## Common questions

### How long are homes taking to sell in Austin?

A median of 40 days in December 2016. That is the number to watch if you only watch one, days on market turns before price does, in both directions. For reference, since October 2016 this measure has ranged from 16 days in May 2016 to 40 in December 2016.

### What are the best neighborhoods in Austin for families?

It depends on what you are optimizing for, and anyone who answers without asking is selling you something. Broadly: Circle C, Steiner Ranch and Avery Ranch for space and schools; Mueller, Crestview and Brentwood for walkability with a yard; Westlake and West Lake Hills for Eanes ISD if the budget reaches; Hyde Park and Bryker Woods for older homes near central. There are honest write-ups of nine of these at [theaustinlocalgroup.com/neighborhoods](/neighborhoods/), including the parts that are not flattering.

### Is it a good time to buy a house in Austin?

Depends entirely on your timeline. At 2.2 months of supply you are competing, paying up, and giving up contingencies. If you need to be in a house this year, you buy and you accept the terms. If you can wait, understand that you are paying a premium for urgency.

### How much are property taxes in Austin?

Combined city, county, school district and community college rates in the Austin area generally land between about 1.8% and 2.5% of assessed value, and higher inside a Municipal Utility District, where 3%+ is possible. There is no state income tax in Texas, and property tax is the trade. Two things every buyer should do: file a homestead exemption by April 30 of the year after you close, which caps annual taxable value increases at 10%, and check whether your target address sits in a MUD or PID before you finalize your budget.

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*Part of a retrospective series on the Austin market, one post per month since 2016, compiled from the historical record. This edition covers December 2016; every figure is as reported for that month, and nothing in it looks past it.*

*Source: Redfin Data Center metro market tracker: single-family, Austin-Round Rock-San Marcos metro, not seasonally adjusted. Mortgage rates are the monthly average of the Freddie Mac Primary Mortgage Market Survey 30-year fixed rate. Payment, tax and insurance figures are estimates for illustration and are not a quote. Median sale price is not a guarantee of value for any specific property.*

*Written by Mike Vilece, a licensed Texas real estate agent with Compass in Austin. If you want the version of this that applies to your street and your budget, [ask me directly](/#contact).*

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