It’s common for home sales to increase in spring and summer. But Austin — and the rest of the nation — have had exceptionally strong starts to the sales season, and it’s part of a broader upward trend in the economy and low mortgage rates.
Those were two of the biggest real estate stories in July. But a few other interesting trends emerged. The market for $10 million-plus condos atop the Manhattan skyline has fallen. And millennials are more reluctant than ever to take the plunge into homeownership, part of a continuing trend driven by rising prices and student debt.
Here’s a look at the month’s most important real estate stories.
U.S. Home Sales: The Rebound is Complete
Existing home sales hit their highest point on record since before the economic crisis of 2008, according to new sales figures. Sales increased by 1.1 percent from May to June — the highest level since February 2007, according to the Wall Street Journal. Job growth, climbing wages and low mortgage rates have helped boost sales. Meanwhile, national housing starts increased by 4.8 percent in June.
Housing Starts Cooled Off in Spring
Maybe it’s Austin’s affordability issues, maybe it was a systematic shift. Either way, developers started fewer commercial and public projects in May, which is the newest data available from Dodge Data & Analytics. Those construction starts slowed by 17 percent during the first five months of 2016 compared to the same period in 2015. Even though residential housing starts climbed by 14 percent in the first five months, year-over-year, that pace slowed by 16 percent in May, the Austin Business Journal reported. Austin’s job growth would suggest the slowdown may have been temporary, but if May’s slowdown continues into the summer, it could stoke the debate over how to combat the city’s affordability and demand issues. The slowdown comes even as national housing starts increased.
The Grove Development Heads to Austin City Council
A controversial plan to develop a prime swath of central Austin is moving forward. The Austin City Council will soon consider a recommendation from the city planning commission to approve a development called “The Grove” southeast of Bull Creek Road and 45h Street. There’s a debate over how much affordable housing should be required in the mixed use development, which will include shopping, restaurants, housing and park space.
Renters Are Reluctant to Take the Plunge Into Homeownership
Blame student debt and rising prices for a continuing trend of renters putting off buying a home. But don’t let the trend overwhelm you. Three-quarters of Americans surveyed by the National Association of Realtors still think now is a good time to buy a home. That’s solid, but the numbers are weaker among renters — only 62 percent of whom think this is the right time to buy. Unsurprisingly, younger buyers have less confidence that they’re prepared to buy a home. Those under 35 have the lowest homeownership rate in recorded history, CNBC reports.
It’s Getting Crowded in the Sky
Developers are starting to hit the brakes on luxury condos perched atop some of Manhattan’s tallest skyscrapers. After several years of fast-paced super luxury developments intended for those willing to pay $10 million or more for a condo, the market has slowed. Part of it is due to shifts in global markets that make the ultra wealthy a little more conservative. And the trend isn’t isolated in New York City. Those high end properties have been decreasing in Paris, Singapore, London, Moscow and Dubai, the New York Times reports.
The NBA Lifestyle in Austin
Los Angeles Clippers basketball player J.J. Redick put his mansion on the market. The $5 million home, located in West Lake HIlls, has six bedrooms, nine bathrooms, a media room, two built-in bars and a stunning wine cellar, CultureMap Austin reports. Redick, however, says he’s staying in Austin to enjoy the lifestyle.
