Northwest Austin Edition | July 2021

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THE FLIGHT TO affordability Homes in the city of Austin surpassed the $500,000 median price point in 2021, and while rst-time home buyers or families looking for a more aordable house could traditionally look away from the city, data shows even the surrounding communities are following the same rapid price growth pattern. Appraisal district data for 2021 is preliminary and does not yet include the result of property owners’ protesting their appraisals.

CITY OF AUSTIN MEDIAN HOUSEHOLD INCOME

Residential value

13.07% INCREASE

$66,697

2016

TRAVIS COUNTY

WILLIAMSON COUNTY

$75,413

Total value: $200B $150B

2019*

INCREASE 58.03%*

*MOST RECENT YEAR AVAILABLE

AUSTIN/ROUND ROCK METRO MEDIAN Sales price

INCREASE 75.75%*

$100B $50B

40.26% INCREASE

$306,498

2018

$429,905

2021*

$0

*YEAR TO DATE AS OF MAY

2016 2020 2021

2016 2020 2021

DESIGNED BY RACHAL RUSSELL

SOURCES: AUSTIN BOARD OF REALTORS, HAYS CENTRAL APPRAISAL DISTRICT, TRAVIS CENTRAL APPRAISAL DISTRICT, U.S. CENSUS BUREAUCOMMUNITY IMPACT NEWSPAPER

*2021 VALUES ARE PRELIMINARY BECAUSE APPRAISAL DISTRICTS HAVE NOT YET PROCESSED APPEALS

this industry,” Boenig said. While Brohn Homes focuses on the outlying areas of Austin, Cody Carr’s family-owned business, Carr Residential, has been building new homes in Aus- tin since 2015. Carr said he has seen a lot of the same challenges, including a tripling of the price of lumber since before the pandemic. The company targets the $400,000-$1 million range for homes it builds, but Carr, who is also pres- ident of the Austin Inll Coalition, said it is becom- ing more and more dicult to stay in that range. A house Carr Residential could have built to sell in the high $300,000 range about ve years ago, he said, would cost $500,000 today. “I’m an Austinite. As an Austinite it’s dicult for me to watch the price of housing increase so dra- matically. My own friends and family are having trouble nding a place to live,” he said. Alternatives to single family Adrianne Craft, a real estate broker who is licensed with Keller Williams Realty, agreed buyers are having a truly dicult time nding homes. “A year ago, I would say that buyers could be a little bit pickier as far as the condition of a home goes,” Craft said. “A buyer may choose a house over another house because it doesn’t have carpet or it has white cabinets. … Whereas now, buyers are having to just concede on everything.” Craft added that every deal she has brokered this year has seen multiple oers for which homes are typically selling for 10%-20% over asking price. In addition to highlighting the current seller’s market, this is a situation that frequently does not favor rst- time buyers, especially those seeking single-fam- ily homes, which account for the vast majority of homes on the market at any given time, she said. One solution ocials in cities throughout the Greater Austin metro area have been examining over the last several years involves diversication of home types. Dan Parolek, CEO of Opticos Design, a California rm that helps collaborate on housing and com- munity issues, has given many presentations to city ocials throughout Central Texas from New Braunfels to Austin. Parolek’s presentations center on a concept called

That breakneck pace of price increases cannot last forever, ABoR president Susan Horton said. Eventually, she said she expects the price to return to some level of normalcy, although that could take years as supply catches up with demand. “The builders can’t build [homes] fast enough to get us where we need to be to accommodate the growth into the metropolitan area,” Horton said. ‘Perfect storm’ of construction challenges Even with demand potentially leveling o after the pandemic as individuals begin reprioritizing their spending habits, increasing supply remains dicult for many builders. Aaron Boenig is the co-president of Brohn Homes, a developer that focuses on homes that are in the price range for rst-time homebuyers. The company builds in areas less expensive than Austin such as Georgetown and San Marcos, but Boenig said it is increasingly dicult to build at a mid- range price point even in outlying areas. Land prices are one factor that is making it harder for developers to build aordable homes, but Boe- nig said buying the land is only one challenge. Long waits for building permit approvals, the jump in materials prices—especially lumber—and labor shortages are also aecting developers. Boenig called it a “perfect storm” that is restricting supply. In the Austin metro as of May, there were 0.5 months of inventory available, according to ABoR, a measure of how long it would take to sell all exist- ing properties on the market. A balanced market, according to Gaines, has about ve to seven months of inventory available. “I think this is unprecedented, the way builders are selling homes, I’ve never seen anything like it in

ACentral Texas seller’s market illuminatesnew trends for homebuyers

BY LAUREN CANTERBERRY, JACK FLAGLER & BRIAN RASH

Eric Bramlett has been a real estate agent in Cen- tral Texas for 18 years and said since the end of the 2008 economic recession, the local housing market has been consistently strong following regular sea- sonal patterns and holding relatively steady in total sales and price. But something happened around the middle of 2020 that pushed the market to take o, according to Realtors and economists. Due to the increase in telework brought on by the COVID-19 pandemic, they said, many employ- ees now working remotely moved in from other, more expensive, cities, no longer tied to their com- mutes. Locally, employees using their homes as oce space thought dierently about their needs. While unemployment levels reached the double digits nationwide, those who kept jobs built up dis- posable income. “We were the hottest market, and we essentially dumped gasoline on it,” Bramlett said. Before July 2020, the monthly median home sales price in the Austin-Round Rock metropoli- tan area had never reached $350,000. It surpassed $400,000 in March 2021, then reached $465,000 in May, the most recent month data is available from the Austin Board of Realtors. That is a 27.4% increase from January. “You don’t have to have a Ph.D in economics to understand that if prices go up faster than incomes and home aordability is based on the relationship between income and price, then [homeownership is] becoming less aordable,” said James Gaines, research economist at Texas A&M University’s Texas Real Estate Center.

The builders can’t build [houses] fast enough to get us where we need to be to accommodate the growth into

the metropolitan area. SUSAN HORTON, PRESIDENT OF AUSTIN BOARD OF REALTORS

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