Although Austin housing stats took a plunge in April, there are already signs that demand remains high. Recent real estate statistics show that housing demand remains strong, encouraging developers to continue to invest in the Austin real estate market. As a result, there continues to be a strong pipeline of residential real estate developments.
Austin Residential Real Estate
According to Austin Board of Realtors’ President Romeo Manzanilla, “We did anticipate a sharp decline in the home sales activity. That’s because it correlates with a decline in the listing activity that was recorded in the month of March due to the stay-at-home orders enforced by the Government. Despite this, homes spent so little time on the market and were sold at much higher prices than the last year. Austin’s housing demand is undeterred and possibly strengthened by the declining inventory.”
In the past decade, there have been droves of people migrating to Austin which has strengthened home values. According to Zillow.com, “Austin’s median home value is $401,199, which is a 5.4% up from the past year.”
A larger pool of homebuyers is looking forward to buying houses in the Austin housing market. However, supply is excruciatingly low while the demand for Austin housing is sky-high. As a result, by the end of the year, home prices in Austin have been predicted to rise.
Austin Home Values
Apart from that, Austin’s median list price per square foot is $232, which is much higher than Austin-Round Rock Metropolitan Statistical Area (MSA) average of $159. Currently, the median price of homes listed on the market is $405,000. Whereas, the median rent price is $1,750 in Austin, which is about $50 higher than Austin-Round Rock Metro’s median of $1,700.
As stated by the Austin Board of Realtors, the ongoing pandemic hasn’t had a huge impact on real estate activity in the region. There were a few declines in the listing activity as well as pending residential sales. Alongside this, the closing process is being conducted with significant measures to avoid the curb the spread of the virus, due to which it’s taking longer than usual. However, the ongoing pandemic hasn’t led to the lowering down of the prices. Tight inventory, historically low-interest rates as well as a bold demand is currently favoring the sellers in Austin’s housing market.
As predicted by Lawrence Yun, senior vice president of research & chief economist at the National Association of Realtors, “Once the economy opens, we can expect the number of homes being listed in the market to increase at an exponential rate. By the end of 2020, the home sales could possibly be at the same levels as they were in 2019.”
Development is Growing Throughout Austin
According to the Austin Business Journal article, “Austin real estate deals haven’t stopped rolling, despite the ongoing Covid-19 pandemic,” continued residential real estate deals and projects signal continued growth and interest from investors. Recently, 37th Parallel Properties Investment Group, a popular Richmond, Virginia-based real estate firm, has returned back to the Austin Market. During the month of April, this privately held multifamily investor purchased the following 2 apartment communities in Austin:
- 128-unit Bridgehead Apartments (Westlake)
- 132-unit Melrose Place Apartments (North Austin)
On top of this, the investor also picked up Tradewinds, a San Antonio Apartment community, in the transaction.
Company officials have revealed that it plans on carrying out unspecified upgrades to properties in order to tackle the rising rents as well as lack of apartment supply problems in North & West Austin.
According to 37th Parallel COO & Managing Partner Dan Chamberlain, “These assets, owned and operated by a local family for nearly 2 decades, these assets have heavily benefited from outstanding long-term ownership. Having dealt with this same family in the past, we were extremely thrilled when they got in touch with us with another opportunity to work with them again.”
Since its foundation in 2008, this firm has managed to acquire more than about 4,996 apartment units as well as carried out transactions somewhat near $545 million across Southeast & Texas on behalf of the rich, high-net-worth family office as well as institutional investors.
While considering a real estate market’s strength, Mark Sprague, one of the top housing market experts, takes into consideration the following two factors:
- The capability of a local economy to add about 22,000+ jobs in a single year
- Consumer confidence
And he has stated both of these factors to appear great in Austin currently. With respect to consumer confidence, he thinks that as long as it ranges between 90 & 100, consumers will keep on buying homes. In case it’s above 110, the sellers will be receiving dozens of offers.
Prior to the crisis, consumer confidence was a massive 154 in the city. However, as a result of the Covid-19 pandemic, it has dropped by about 30 points. In spite of that, it’s still above the 110-margin.
Mary Anne McMahon, the owner of Austin’s one of the best agencies Re/Max Posh Properties has claimed almost all of her agents across the board are quite busy as they have been receiving multiple offers for lower-end properties ranging between $350,000 and $600,000.
As of this writing, about nearly 4,385 homes are listed in the market with the highest price being $12,999,000 and the lowest at $25,000.
In short, it can be concluded that the shutdown related to the Covid-19 pandemic hasn’t had a major long-term impact on Austin’s residential real estate market. Austin real estate has been predicted to reach back to the same levels as 2019 by the end of this year.
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