Nationwide real estate has been making a strong recovery over the years. To demonstrate this fact, the September S&P CoreLogic Case-Shiller Home Price Indices reported that home prices had increased over-the-year for 53 months in a row. The report also showed that home prices have recovered to within 20 percent below pre-recession peaks when accounting for inflation. However, real estate recovery isn’t equally strong across all areas in the nation. In Austin, real estate is recovering stronger than most other areas of the country.
Austin Population Growth and Real Estate Demand
Recently, an analysis of housing price data between the years of 2006 and 2016 show that Austin leads the nation in home value growth. That’s largely due to the number of people moving to the metro to take advantage of the strong economy, plentiful jobs and low cost of living. Reports show that the Austin area has experienced the second-fastest population growth in the country. Incredible population growth has ballooned housing demand in an already low-inventory market.
As buyers snatch up homes almost as soon as they hit the market, housing supply dwindles despite builders’ best efforts to keep up. Add the continuing stream of newcomers to the area and what results is the current low-inventory market that’s steadily pushing up home values. One area in which the effects of high demand on inventory can be seen is in the starter home market.
Real Estate Demand vs. Low Inventory
A recent report from Trulia shows that this low-inventory vs. high demand trend has been influencing many other real estate markets in the U.S., but not equally. Since 2012, Austin has seen enormous drops in the availability of starter home inventory. However, despite the precipitous drop in starter home availability driving up home prices, Austin homes are still some of the most affordable real estate in the U.S.
Other data from Trulia shows that Austin starter homes have a median price tag of $182,867. That’s less than $20,000 more than the national median price for a starter home, which now sits at $164,920. When considering the increase in income it takes to afford an Austin starter home in 2016 compared to 2012, Austin starter homes only require a 4.2 percent increase in income.
Real Estate Affordability
Buyers in many other real estate markets in the U.S. don’t fare so well. In fact, buyers of starter homes in major California cities have been effectively priced out of the market.
“First-time buyers in the metro areas of Los Angeles, Oakland, Orange County, Sacramento, San Francisco, and San Jose used between 23 percent and 29 percent more of their income to buy a home in 2016 than they did in 2012,” Trulia reported.
Based on those numbers, it’s no wonder why Californians are moving to Austin at such a high rate. It’s also easy to see how Austin is able to attract over 100 newcomers per day and achieve one of the largest population booms in the country. Austin real estate is expected to end 2016 with another record-breaking year. Since the Austin economy isn’t showing signs of an impending crash, the strong real estate trend is expected to continue into 2017.
Take Advantage of the Current Market
Contact David Brodsky Properties to schedule a free, no-obligation consultation with one of our Austin real estate strategists. This is a great time to take advantage of current mortgage rates and buyer demand. We’ll be happy to provide you with a home price report for the area in which you’d like to live.
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