The price of housing in the city of Austin is expected to continue sharply climbing while options for entry-level homes wane, according to a recently published real estate report.
The Texas A&M University Texas Real Estate Center on Jan. 7 published its annual Texas Housing & Economic Outlook, which forecasts the year ahead in real estate trends for single-family housing, apartments and commercial real estate.
Despite a projected sluggish domestic economy in the first half of 2021, the Texas A&M research team in its study predicts affordable housing will be increasingly difficult to acquire in Austin over the next 24 months.
“The 2021 housing market will be characterized by strong demand with low inventories accompanied by positive price growth. Inventories of homes priced under $300,000 will be especially low, affecting sales in that price range,” the Texas A&M research staff wrote in a Jan. 7 news release.
According to the report, the price per square foot for a residential single-family home in the Austin metropolitan statistical area rose by 8.1% in 2020. In 2021, Texas A&M researches forecast growth will accelerate, with the price per square foot increasing by 8.6% in 2021 and again by 7.2% in 2022.
In 2019, the price per square foot of homes in the Austin MSA rose by 4.2%.
This all comes even as homebuilders attempt to keep up with demand in the area. The Texas Real Estate Center found submitted housing permits rose by 14.7% in 2020 compared to 2019. In 2021, submitted permits in the Austin MSA will again increase by 13.4%, according to forecasts from the research team.
“Homebuilders are trying to satisfy demand in the lower price cohorts by building homes in the suburbs or outer city borders where land costs are lower. This trend was prevalent before the pandemic but has accelerated during COVID-19,” the research team wrote.
According to the Austin Board of Realtors’ November housing market report, the median price of single-family homes in Austin was $455,000, an 11.5% year-over-year increase.
Report forecasts Austin’s affordable housing woes to deepen following coronavirus pandemic
A recent Texas A&M University Texas Real Estate Center report forecasts submitted housing permits will increase by 13.4% in 2021. (Jack Flagler/Community Impact Newspaper)