Austin Housing Market Will Keep Rising in 2020 and Beyond
January 9, 2020 | Front Porch Realty
Multiple survey’s ranked Austin as one of the hottest real estate markets in the U.S. in terms of long range outlook.
Forecasts for the Austin, Texas housing market suggests that home prices in the area will continue to rise throughout 2020. Multiple survey’s ranked Austin as one of the hottest real estate markets in the U.S. in terms of long range outlook.
What makes central Texas such a housing hotspot?
There are multiple factors at work here with two standing out to help Austin rise to the top. Through 2019 and into 2020, the Austin housing market has gotten a strong boost from:
- Rapidly growing population that has increased demand for homes
- An ongoing supply shortage that increases competition among buyers
In short, there are plenty of buyers in the market searching for properties, but not enough homes to go around. Of course, this is true for many cities across the U.S. as we enter 2020. But the imbalance is particularly strong in the Austin-Round Rock metro area.
Steady Home Prices Growth Expected in 2020
Over the past few years, home prices have risen across the entire Austin-Round Rock metro area. But the biggest gains have occurred within the city itself.
In December the Austin Board of REALTORS released data showing the median price for a single family home within they city of Austin rose over 10% compared to just a year ago. The median is now above $400,000 and growing.
Forecasters are predicting a continuation of this trend throughout 2020. A recent prediction from Zillow shows home prices in Austin, Texas would rise “2.8%” in 2020.
Home prices in the Austin real estate market have risen steadily over the past year, outpacing the national average. There is a very good chance that this trend will continue into the next decade.
Experts Predict Austin Real Estate Market Will Keep Outperforming
On January 1, 2020, Zillow published a report based on its survey of more than 100 economists and real estate analysts nationwide. Among other things, they asked survey participants to rate their 2020 expectated home value compared to the nation in 25 large markets.
Basically they asked if the 25 biggest housing markets would outperform or underperform in 2020, compared to av rage home price growth nationwide.
The majority of those who participated in the survey picked Austin, Texas as one of the housing market that will continue to outperform in 2020.
That report suggests that a staggering 80% of those surveyed expect Austin to outperform average U.S. home price growth in 2020.
This is not surprising to anyone who follows housing trends. The hot real estate market in Austin has become increasingly more competitive over the last few years, as more Silicon Valley companies move into the area, more buyers move with them. This is largely the result of Austin’s real estate market remaining one of the more enticing markets for dollar value for residential and commercial interests alike.
Population Growth Drives Housing Demand in Austin
The U.S. Census Bureau reports Austin’s population rose over 20% 2010 to 2019, nearly one million people now call the city home. The broader Austin metro area which includes Austin and the surrounding real estate markets reached over two million residents.
According to the Austin Chamber of Commerce Austin’s population surpassed two million in 2015. The table below created by the Chamber shows how Austin has outpaced both the state of Texas and the nation as a whole in terms of population growth.
This trend has increased demand for housing on both the rental and purchase side of the Austin real estate market. It has also increased competition among home buyers, which puts upward pressure on house values across the metro area. This is arguably the dominant factor driving those strong forecasts for the Austin housing market in 2020.
New Job Market Attracts New Residents
As of November 2019, the unemployment rate for the Austin Round Rock San Marcos metro area was 2.5%. That’s based on figures reported by the U.S. Bureau of Labor Statistics.
A strong local job market boosts the Austin real estate market in several ways. For one thing it attracts new residents from elsewhere in the country. A recent analysis from the Census Bureau showed Austin is one of the top destinations for relocating job-seekers.
Austin’s housing market ranked first
A few years back, Austin’s housing market ranked first for net migration among the nations 50 biggest metro areas. In 2017 Austin had the highest level of residents who had recently moved from another large metro. In the end a simple supply demand equation keeps Austin’s housing market under pressure. All this comes at at time when the inventory of for-sale properties falls well below what is considered a balanced market.
Austin housing market has remained in a six month housing shortage for over a decade. This simply means that it would take approximately six months of housing development without a single new resident moving to the Austin area to achieve this “balance”.
With the Austin real estate market showing no signs of slowing down or stopping don’t wait another minute to reach out to our experienced real estate team help you, Call 512 293-7539 today
