As 2017 reaches its midpoint, builders and brokers around Central Texas received an update on the greater Austin housing market July 20.
“Despite its challenges, Austin is still a highly desirable place to live, and I expect another strong year ahead of us,” said Vaike O’Grady, Austin regional director for Metrostudy.
O’Grady, along with guest speakers Tim Riley and Patrick Rose, discussed the Austin-Round Rock housing market during the 2017 Mid-Year Housing Update hosted by the Home Builders Association of Greater Austin.
The number of homes sold, O’Grady said, continues to increase. According to the Texas A&M Real Estate Center, the number of homes sales in January 2017 was 1,730. By May 2017, it has reached 3,842.
A house priced between $200,000 and $300,000 is staying on the market an average of 59 days, O’Grady said, while one priced between $400,000 and $500,000 is on the market about 90 days.
“There’s quite a difference when it comes to price point,” she said.
One of the challenges for the area is income levels have not been keeping pace with the price increase, O’Grady said. Two challenges for young potential buyers, in particular, are dealing with student debt and feeling stuck in their homes.
“They purchased their home at $250,000. They can sell it at $400,000, but what can they buy for $400,000?” she said. “They have to go out of town.”
As a result, she said some remodeling activity has picked up in the region.
The top submarket in the area was Cedar Park Leander West—which is the portion of Cedar Park and Leander west of Toll 183A—followed by Pflugerville.
Tim Riley, co-founder of land brokerage firm Riley-McLean Land, discussed the challenges for affordable housing in the greater Austin area. He said he is seeing a need to redefine affordable housing based on current trends. He said there is a continued demand for development and replacement housing lots, but the ability to produce affordable housing on the lot is difficult due in part to the “land development cost and the land cost continu[ing]to rise almost exponentially.”
There are two options developers are trying to do to address the need for affordable housing. One is to construct smaller projects with higher densities on smaller lots, and the other is to develop tertiary markets—Taylor, Elgin, Bastrop and San Marcos—that Riley said would not have been looked at about a year ago.
Rose, founder and president of Corridor Title, discussed the growth in the south and southeast portions of Austin. He said infrastructure has played a role in opening up opportunities for growth and success in that area of the region.
“While everything has been happening in the north and west, there has been tremendous momentum south and east,” he said.
He said schools, capital investments, job creation and geography all play a role in the “quiet” growth in the south and east portion of the greater Austin region.
“I was very surprised by the depth of public sector and private sector in this area,” Rose said, including successful school bonds by school districts such as Del Valle ISD and Hays CISD.
For more information about the Home Builders Association of Greater Austin, visit www.hbaaustin.com.