Austin News

Austin's housing market is starting to slow because of the novel coronavirus (COVID-19), which has caused an economic shock across the nation. 

Eldon Rude, a housing industry expert, said last month that 2020 would  be big for housing, barring an "unforeseen global or economic shock that would result in a sharp drop in consumer confidence. ... If job growth remains at levels we have seen in recent years, I don’t see anything on the horizon that will slow the robust demand we have seen for housing in the region in recent years."

The event Rude predicted has happened.

Nigel Green, founder and CEO of deVere Group, said the downturn is expected to be short, but will cut deeply. 

“The slowdown will be temporary because it’s not caused by deep-rooted problems and imbalances in the economy, (but) rather by a wholly unexpected shock that’s gripped the world,” he said.

Austin's housing market has begun to be affected by the virus, with real estate agents canceling open houses and advising buyers to wait. 

Regional director of Metrostudy Vaike O'Grady said the market is just starting to be impacted. 

“The fundamentals of the Austin market (including job and population growth) are strong, but we’ve never faced a situation like this before,” she said. “Home shoppers have been encouraged by record low (mortgage interest) rates, but recent stock market volatility has led to some pain and uncertainty. And like everyone else, builders are grappling with how to keep their employees and their customers safe and healthy.”

Housing market and financial industries expert Mark Sprague said Central Texas has become stronger in the last two decades, which led him to believe it can withstand the downturns in the economy. 

“Overall, Austin’s economy and housing market look to be resilient during this uncertain time,” Sprague said.

There is still a lot that isn't known right now, Mary McMahon, owner of Re/Max Posh Properties and Motto Mortgage ATX, said. 

“There is still an air of uncertainty over which way potential home buyers will be pulled,” McMahon said. “With Austin’s very strong economy, evolving population, record-low mortgage rates and an economy with a 50-year low in its unemployment rate, we will continue to prosper and have forward momentum."

Some homes in the area are still priced competitively. 

Nash Garrison, an Austin homeowner, said he isn't letting the pandemic prevent him from selling his house. 

“I’m trying to figure out some new normal, a nontraditional route where the house can get exposure but without having a bunch of strangers coming through just to check it out with zero intention of buying and having to disinfect and Purell everything afterward,” Garrison said. “It’s just unfortunate but right now it’s a poor time to do that.”

Even though COVID-19 is circulating, Garrison said he wants to see what happens when his house is on the market. 

“It’s still going to be a strong market, regardless of what happens,” he said. “I want to keep living my life and doing what makes me happy.”

Home value growth has picked up after a slow down lasting two years, Zillow statistics said. 

“In February, we saw inventory stuck near record lows, which was finally enough to reignite home price appreciation after a cooler 2019... Now, though, as so much is uncertain, we are entering uncharted territory for the housing market,” Jeff Tucker, a Zillow economist, said. 

During past pandemics, research shows that the housing market slowed then as well, Zillow said. 

“Years of tighter credit standards have reduced the risk of widespread foreclosures like we experienced a decade ago,” Svenja Gudell, chief economist at Zillow, said. “Additionally, upward pressure on prices will remain, driven by limited supply with tight housing inventory and demand that’s boosted by record-low mortgage rates.”

Throughout the U.S., 48% or real estate agents said interest in homes has decreased because of COVID-19, a survey by the National Association of Realtors said. 

“The decline in confidence related to the direction of the economy coupled with the unprecedented measures taken to combat the spread of COVID-19, including major social distancing efforts nationwide, are naturally bringing an abundance of caution among buyers and sellers,” Lawrence Yun, the National Association of Realtors chief economist, said. “With fewer listings in what’s already a housing shortage environment, home prices are likely to hold steady. The temporary softening of the real estate market will likely be followed by a strong rebound once the economic ‘quarantine’ is lifted, and it’s critical that supply is sufficient to meet pent-up demand.”

Sprague said once COVID-19 dies down, there is potential for even more buyers looking into the housing market in Austin. 

“I would expect those looking for a more affordable cost of living compared to other major U.S. metropolitan areas will still look to move to and buy homes in Austin,” Sprague said.