U.S. real estate stats tend to lag by a month or two, which makes October a time when analysts are getting their first broad look at the past summer’s market.
They’re seeing mixed messages.
While the housing market has continued its upward march — both in terms of sales and prices — it has also shown signs of stabilization as prices and demand climb. The pace of sales on existing homes fell 1.7 points in August, nationally. Meanwhile, in Austin, sales and prices continued their upward trajectories throughout the summer.
In fact, Austin is coming off the hottest summer of residential real estate sales ever. Single-family home sales volume hit a new milestone this summer as the metro area’s sales exceeded $1 billion in June, July and August, the Austin Board of Realtors reported.
But, real estate isn’t all about stats. There are plenty of interesting stories in the news. For example, the $6 million mansion the University of Texas football coach quietly purchased through a friend’s trust — that made big news in Austin, even though it was months after the actual closing.
Meanwhile, Austin and a dozen or so other cities are already vying to win over e-commerce giant Amazon as the company looks to add 50,000 jobs that pay an average of $100,000 to whichever market can win the company over with its incentives, tech talent and other factors.
You’ll learn about that and more in our August real estate news roundup. Let’s check it out.
Texas Coach, Mediterranean-Style Home
The head coach of the Texas Longhorns football team didn’t exactly broadcast his purchase of a $6 million mansion. In fact, we’re not even quite sure of the location. But, the Austin Business Journal reported Tom Herman quietly purchased the property through a close friend’s trust, with closing on the 10,113-square-foot Mediterranean-style home happening on June 29. It has a beach, a fire pit, an infinity pool and a children’s wing.
Austin’s Housing Market is Hot, But Flipping Has Cooled
Austin homes are being purchased, refurbished and resold at a rapid rate. But new data from Attom Data Solutions indicates Austin flippers aren’t faring particularly well compared to peer cities. The report says 216 homes were flipped in the second quarter of 2017. The medina return was 26 percent — and it took an average of 219 days to flip them. The national average was a 48.4 percent return on investment. Pittsburgh posted the highest returns — 146 percent — and Honolulu was at the bottom, with 17.8 percent return on investment of a flipped home or condo.
Every City Wants Amazon’s Second HQ, But Only a Few Standout
Amazon announced in September it would build a second headquarters in North America, and it’s inviting cities to make their pitch. The potential is huge — a $5 billion investment that could bring 50,000 jobs with an average salary of $100,000. A new analysis by CoStar News shows there are a few clear frontrunners, based on Amazon’s need and available metrics. They are: Atlanta, Austin, Dallas/Fort Worth, Denver and Nashville. Austin is already home to a large Amazon office in the Domain district in North Austin. It’s also building a bookstore there. And, overall, Amazon has 20,000 employees in Texas. But, not everyone will be excited for the influx of high-paying jobs. Austin is already struggling to provide enough affordable housing for many of its fixed-income and low- and mid-income families. And the city’s appetite for major taxpayer-backed incentives has waned through the years as the city has become a natural draw for big tech companies, including Apple, Google and Facebook.
A Record Summer for Austin Home Sales
Austin area home sales only increased a little bit in August, compared to the same month a year prior. But don’t let the modest increase mislead — Austin is coming off the hottest summer of residential real estate sales ever. Single-family home sales volume hit a new milestone this summer as the metro area’s sales exceeded $1 billion in June, July and August, the Austin Board of Realtors reported. The $1 billion mark is getting to be the new norm as housing prices continue to rise. The median rate also set records this summer, with median prices above $300,000 each month. Get the details in our monthly market report.
Have Home Prices Reached a Momentary Peak?
The U.S. real estate market has largely recovered from the mortgage crisis of 2008. But prices in many markets seem to have reached their peak, according to several economists who spoke with CNBC. After reaching a high point earlier this year in March, prices have largely stagnated on a national level. The most recent nationwide data from July shows prices were up 6.2 percent from the year prior. But the value gains have tapered off. In some markets, like Washington D.C., prices have flatlined or gone slightly down. But, there are plenty of exceptions, including Austin and the Pacific Northwest, where prices continue to climb as demand has kept growing.
Home Sales Slow Nationwide
The pace of sales on existing homes fell 1.7 points in August, the National Association of Realtors reported. That’s the fourth time sales have slipped year-over-year in five months. And some of that has to do with price fatigue. The cost of a median home reached $253,000 in August, that’s a 5.6 percent increase from a year prior. But with the job market remaining strong, new construction might help ease some of the pain in some markets, economists told Forbes.