Home sales abound in Austin suburbs with lower prices, greater options

Article provided by: The Austin Business Journal

By far the most active ZIP code for Austiin-area housing sales — single-family residences, condos and townhomes combined — is 78660, according to data released by the Austin Board of Realtors.

That ZIP traces to Pflugerville north of Austin, which recorded 530 re-sales and new home sales since the beginning of the year. A majority of the most active housing areas are outside the Austin city limits — reflecting to some degree a stagnancy within the inner core that could be due to a number of factors such as lack of inventory in price points that are affordable for most households.

"The city of Austin's housing market is drastically different than surrounding areas," said ABOR President Aaron Farmer. "In Austin home sales growth is suppressed, inventory is more constrained and home prices are much higher."

Consider this: ZIP code 78701 in the heart of downtown Austin has seen a drop in the number of sales year-to-date of almost 23 percent, but the price per square foot of those units sold was the highest in the metro area — $529 per square foot, which even eclipses the tony area of Tarrytown, where per square foot sales prices were $402 thus far in 2016. Even in the highly desired Tarrytown ZIP of 78703, sales were flat.

In Austin proper, one submarket dominated sales despite record high prices — South Austin from Lady Bird Lake all the way to the Hays County line. In 78704, one of the most popular areas in the city, 245 sales have been recorded this year at $364 per square foot, a year-over-year increase of 13 percent. Strong sales also were recorded south of Texas Highway 71 — more modest neighborhoods in 78745 and 78748 — for a combined 479 sales.

Yet clearly the most action is on the city's fringes.

For the past several years, homebuilders have been opting to deliver new product within other municipalities and unincorporated area because of the high costs and development delays within the city limits. Many of the ZIP codes with the most sales velocity are benefiting from new construction.

After Pflugerville, Leander ZIP code 78641 recorded the second-most home sales — 450 in the first four months of 2016.

While some real estate experts see some softening of the markets in Williamson County — possibly due to diminishing inventory — ZIP codes in Round Rock, Georgetown and Cedar Park all recorded strong sales activity.

Georgetown ZIP codes 78626, 78628 and 78633 reported a combined 641 sales since the beginning of the year. Round Rock ZIP codes 78664, 78665 and 78681 had 808 sales. Cedar Park 78613 reported 411 sales and even Hutto 78634 reported 242 sales thus far.

Hays County to the south also is seeing robust sales activity. Kyle ZIP code 78640 recorded 285 sales thus far this year, while Buda had 238 sales.

Kyle appears to be the best location for buying a new house at a reasonable price. About 80 new homes have delivered this year for an average price per square foot of $115. Pflugerville also looks like a deal. Some 135 new homes have sold there for an average price per square foot of $121. At a slightly higher price point, Leander 78641 recorded 142 new home sales for an average price per square foot of $130.

For buyers interested in the luxury market, this appears to be a good time to shop. For instance in 78746, which includes Rollingwood and Westlake where mansions abound, sales velocity is down 28 percent compared to a year ago. The price per square foot is $302, a drop of about 3 percent.

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Author: Monte Davis

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