# Austin Housing Market Report: May 2020, Why Inventory Collapsed Instead of Flooding

> The Austin metro median sale price was $329,416 in May 2020, -0.2% year over year, with homes selling in 23 days and 2.4 months of supply. Why Inventory Collapsed Instead of Flooding, what the numbers mean if you are buying or selling in Austin.

Mike Vilece · June 15, 2020
Canonical page: https://theaustinlocalgroup.com/blog/austin-housing-market-may-2020/

Money cost **3.23%** in May 2020. The average 30-year fixed rate for the month, the lowest monthly average in this series so far. Active inventory stood at 5,654 listings, down 20.3% year over year. Closed volume was 2,399 homes, down 30.3% year over year. That made it a seller's market.

## Austin market statistics, May 2020

| Metric | May 2020 |
| --- | --- |
| Median sale price | $329,416 (-0.2% YoY) |
| Median price per sq ft | $161 (+2.6% YoY) |
| Homes sold | 2,399 (-30.3% YoY) |
| New listings | 3,489 |
| Active inventory | 5,654 (-20.3% YoY) |
| Months of supply | 2.4 |
| Median days on market | 23 |
| Sale-to-list ratio | 99.0% |
| Sold above asking | 24.1% |
| Listings with a price cut | 25.9% |
| 30-year fixed rate (avg) | 3.23% |

## Why Inventory Collapsed Instead of Flooding

The expected wave of distressed listings never came. Forbearance programs let owners pause payments instead of selling, and sellers who did not have to move simply did not list. Supply fell faster than demand, which is why the 2020 recession produced a price boom.

## What changed since April 2020

The median rose $4,416 from April 2020, a 1.4% move. Time on market lengthened by 6 days, to 23. Active inventory shrank by 363 listings, to 5,654. The share of homes selling over asking gave up 6.8 points, to 24.1%.

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

| | May 2020 | April 2020 | May 2019 | Since Oct 2016 |
| --- | --- | --- | --- | --- |
| Median sale price | $329,416 | $325,000 | $330,000 | range $255,626–$332,327 |
| Median days on market | 23 | 17 | 22 | range 16–58 |
| Active inventory | 5,654 | 6,017 | 7,094 | range 4,660–7,969 |
| Months of supply | 2.4 | 2.6 | 2.1 | range 1.9–3.8 |
| Sold above asking | 24% | 31% | 27% | range 14%–31% |
| 30-year fixed rate | 3.23% | 3.31% | 4.07% | lowest since Oct 2016 |

The right-hand column is the range this series has covered since October 2016. No forecast in it, just where May 2020 falls against every month that came before it.

## If you are buying in Austin right now

2.4 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 sale closed at 99.0% of list, essentially at asking. The negotiation in a month like this happens on price cuts before you arrive and on repairs after you are under contract, not on the headline number.

**The payment math.** At $329,416 with 20% down at 3.23%, principal and interest runs about **$1,144 a month**. Add roughly $549 for property taxes and $220 for insurance and you are near **$1,913 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 23 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

**East Austin (78702).** Holly, Rosewood. Known for creative, eclectic, strong appreciation. It fits buyers who want character and culture.

The metro numbers above are an average of a very unequal city, East Austin 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/east-austin/](/neighborhoods/east-austin/), including what is wrong with it.

## On in Austin, May 2020

| When | What | Why it matters to a listing |
| --- | --- | --- |
| May 2020 | **Public events**, cancelled | Austin's public event calendar did not run in its usual form. Large gatherings were restricted from mid-March 2020, and the festivals, races and street closures that normally shape a month here were cancelled, moved online or held at reduced size. |

## What is coming next

Summer. Also: Tesla is publicly shopping a site for a new factory, and Austin is on the list.

## Common questions

### When is the best time of year to buy a house in Austin?

October through January, consistently. Austin's listing calendar runs about six weeks ahead of the national one. The best selection appears in March and April, and so does the most competition. By late fall, spring listings are six months old, sellers have adjusted their expectations, and days on market runs 30 to 50 days longer than it did in April. You get less to choose from and far more leverage over what is left.

### What is the average home price in Austin?

The median single-family sale across the Austin metro in May 2020 was $329,416. Median is the more useful number than average here. A handful of Westlake and Tarrytown sales pull an average upward in a way that tells you nothing about what you will pay. Note also that the metro figure covers Travis, Williamson, Hays, Bastrop and Caldwell counties; the City of Austin proper runs meaningfully higher, and the suburbs meaningfully lower.

### Is Austin a buyer's market or a seller's market?

In May 2020, a seller's market, 2.4 months of supply, with 24% of homes selling above asking. The rough convention: under about 3 months favors sellers, 4 to 6 is balanced, and above 6 favors buyers. Since October 2016 this metro has ranged from 1.9 months in December 2019 to 3.8 in January 2019.

### What is a MUD district and why does it matter?

A Municipal Utility District is a taxing entity that finances water, sewer and drainage infrastructure in developments outside city utility service: common in Leander, Kyle, Buda, Manor and parts of Pflugerville and Dripping Springs. It levies its own rate on top of city, county and school, and can add a full percentage point or more to your effective tax rate. MUD rates typically decline as the district's debt is paid down, but that takes decades. It is the most common surprise in a suburban Central Texas closing, and it is disclosed, read the MUD notice.

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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 May 2020; 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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