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Amidst the pandemic, the Austin real estate market has experienced critically low levels of housing inventory. Home sales initially saw a decline, but have now rebounded and increased to all time record setting levels. The Austin-Round Rock metropolitan area is one of the fastest growing areas in the country. Across the area, the housing market is beyond competitive and shows no signs of slowing. Over the past ten years, Austin has been one of the best long term real estate investments in the U.S. Despite the impact of COVID-19, Austin’s rate of job and population growth (which directly tie into real estate demand) are forecasted to experience continued growth.

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Seller’s Market

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The area is currently experiencing a seller’s market as the demand for buyers is outpacing the current home inventory.  At this point, this lack of inventory is pushing prices to increase. Austin's median home price has increased almost 29% over the last year, marking the highest growth ever seen. The new median price home price is at an all time high of $425,000.

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The trifecta of historically low interest rates, high demand, and low inventory all point to a continuing seller’s market. To give some context of the low inventory we are currently experiencing, in a ‘balanced’ market housing inventory would reach 0 in about 5-6 months. In today’s Austin market, this has dropped to .5 months.

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Benefits for Buyers

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Due to the historically low interest rates, the current market can also be seen as a good time for buyers to land some deals. The 30-year, fixed mortgage interest rate is just over 3%.

Austin was recently ranked at #7 as one of the top best places to invest in real estate. With excellent opportunities for investors and a strong job market bringing in many looking for a change, rental units continue to have high occupancy rates. That’s good news for investors as a very positive ROI can be expected in most cases.

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Outlook

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One of the most resilient areas of the economy during the economic shutdown has been real estate. There are only eight U.S. metropolitan areas to have fully recovered in the past decade to pre-recession values, and Austin is one of them. Despite what it may sound like, the Austin market is not in a ‘bubble’ since the high demand is consistent and inventory is very low.

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For investors, this bodes well as it’s a combination of a healthy flow of home-buyers along with steady activity. It is forecasted that Millennials will be the largest demographic of buyers in Austin for the next few years. Neighborhoods that have amenities such as pools, parks, shopping, and restaurants will be desired.

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Austin buyers are as varied as the population itself, so this list of some of the popular neighborhoods in the area follow suit, checking off a diverse set of boxes:

• Allandale

• Barton Creek

• Brushy Creek

• Crestview

• Downtown Austin

• Hyde Park

• Mueller

• North Austin

• Northwest Hills

• Rollingwood

• Shady Hollow

• South Austin

• Spicewood Summit

• Steiner Ranch

• West Lake Hills

• Windsor Park

 

The Austin metro area continues to enjoy a strong real estate market with many attractive aspects for investors.  Whether your interest is a single-family home, condo, or land, we’re here to help.

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Please note: the info here is commentary and not formal advice; financial or otherwise. Many factors impact a real estate market, and those can change quickly.

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