It’s been a great 9 years for Austin real estate. The housing market has made steady, positive gains year-over-year for almost a decade now. Such a trend has to end sometime, though, which leaves many locals wondering when home value growth is going to start slowing down. According to one expert, Austin area real estate will remain strong throughout 2019.
Austin Real Estate Housing Demand
Austin real estate growth has been fueled by strong population gains as a result of the strong jobs market and affordable – yet desirable – lifestyle options. Job seekers from all over the U.S. are moving here to take advantage of the lower cost of living and abundant recreation and entertainment options. The continual stream of newcomers is fueling high housing demand that builders are struggling to keep up with.
Jim Gaines, the chief economist at the Real Estate Center at Texas A&M University, spoke at an industry presentation at the mid-year forecast event sponsored by the Austin Board of REALTORS® (ABoR). His outlook has Austin area real estate making strong gains this and next year. In 2020, however, his outlook is much less certain.
The potential for an Austin Real Estate Decline
According to an interview published in The Austin American-Statesman, the picture “gets fuzzy” in 2020. Also, the momentum for the state’s most expensive housing market in Austin could begin to slow in 2020. He credits the uncertainty to a U.S. presidential election year, in addition to trade/tariff issues and possible labor shortages.
“This area has just been booming,” Gaines said. “That momentum is still going, and it’s still going strong. But it will slow down eventually.”
Gaines can’t say when exactly the Austin real estate market will slow down – nor can anyone else. Despite that, though he was confident that throughout 2019, the market should remain strong and perform well. His prediction is backed up by a robust 3.7 percent job growth in the Austin area. In addition to the swelling population seeking job opportunities, limited inventory to fill housing demand continues to push home prices up, he said. In fact, he expects the median home price in the Austin area to climb about 5.5 percent this year.
The 2019 Forecast for Austin Real Estate
Also this year, Gaines expects another record-breaking real estate market in the Austin area this year and possibly in 2019. Because of the increasing numbers of people flocking to the Central Texas area, developers will continue to be challenged to produce homes for the most popular price points.
Gaines pointed out that in 2011, 67 percent of houses that were sold were priced below $250,000. During that same timeframe, 32 percent of homes sold were priced from $250,000 to just under $1 million.
Those percentages had flipped by 2017, where 63 percent of home sales were above $250,000, and 35 percent were below.
Despite the expected home price record for 2019, Gaines said that the rate of price growth could slow a bit. His prediction is mostly attributed to the anticipation of the Central Texas regions’ incredible real estate market growth to end at some point. When that point will come is a prediction he can’t make. According to his interview published in the Statesman, as an economist, Gaines can tell audiences what will happen, but can’t tell when.
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