Housing Market Still Smoking

Smoking crack, of course.

The Austin Board of Realtors just issued their monthly press release announcing that the number of homes sold in May increased by 15% and the median price increased by 8% to $174,000. These are increases against May of last year, not, as one might assume, increases from last month. In April, the median price was $175,000. It was $166,500 is March, $169,900 in February, $165,750 in January, and $170,000 in December. Housing prices are clearly up from this time last year, but they have been basically flat since the beginning of this year.

The rest of the country has seen a bit of a drop in housing prices overall, partly a correction of large increases in previous years and partly a result of increased mortgage interest rates. ABOR tends to point to cooling markets in the rest of the country as a reason for Austin's continued hotness (investors leave those markets and put more money here), which seems highly dubious. More likely, it is the result of positive long-term economic growth projections combined with intense demand for the limited housing close to downtown or close to the lakes. Austin's housing prices are still well below the national average. Transplants from NYC or San Fran see a 1,500 square foot house for $500k and think, "bargain!"

*Image from Matt Wright on Flickr*