Expert: Austin affordability challenges could reach KyleCity officials in Kyle have long hailed its standing in the Austin metropolitan area as an affordable place to buy a home. But new data suggests that could be changing.

Barb Cooper, president of the Austin Board of Realtors, said Kyle’s housing inventory is significantly lower than the recommended amount for a balanced market, and home prices are rising steadily.

The median price of a home in the city rose 14.69 percent, from $157,852 in February 2014 to $181,052 in February 2015. The rise in home prices was slightly higher in Kyle than Pflugerville and Round Rock during that time, Cooper said.

“With Hays County’s population expected to nearly double by 2050, the housing affordability issues in Austin could soon be present in Kyle as well,” she said.

Among Austin-area cities, Kyle is not so far off cost-wise from more developed cities such as Pflugerville and Round Rock, she said. The median price of a home in Pflugerville and Round Rock is still about $20,000 higher, but prices are climbing at a faster rate in Kyle.

According to the Real Estate Center at Texas A&M University, 6.5 months of inventory represents a balanced housing stock, but Kyle’s housing inventory in February stood at 2.6 months. If the current rate of home sales continues for 2.6 months with no homes being built, then no homes would be available for purchase in Kyle.

With a low supply of homes and demand showing no signs of dying down, the city should brace itself for higher housing costs, Cooper said.

“While there’s no way to predict what home prices will do in the future, it’s safe to say that home prices will continue to increase steadily as Kyle’s population grows,” Cooper said. “Low housing inventory levels, high market demand and the price range of a new housing development can all accelerate home price growth in a market.”Expert: Austin affordability challenges could reach Kyle

Assistant City Manager James Earp, however, said the city remains an affordable place to buy a home in Central Texas.

“I would say that the primary draw to the city of Kyle up to this point has been its housing and availability of housing,” Earp said. “‘Affordable’ depends [on] how you define it. By comparing [area] home prices to what you would pay for something similar in Kyle, we can all agree Kyle is much more affordable than the rest of the region.”

The city is in the midst of a rebranding effort because affordable home prices—many people’s reason for moving to the city—are not sustainable with the pace of its development and the area’s booming population, City Manager Scott Sellers said.

Sellers and the city began the “Style Kyle” initiative earlier this year, which seeks the opinions of residents to determine what the city should build its identity around. The success of Austin’s branding as the “Live Music Capital of the World” is something city officials point to as a model. But Cooper said in a March statement that home prices in the Austin area are at a historic high.

“The Austin-area housing market is the least affordable it has ever been,” she said in the statement. “Solving Austin’s affordability issues is not only dependent upon generating new, affordably priced housing stock, but also preserving and maintaining Austin’s existing housing stock.”

Housing options

She said Kyle should encourage the diversification of housing types in the market and utilize natural resources wisely in addition to building transportation infrastructure.

Earp said the lag in housing development could perhaps be explained by the recession. Earp said that 2013 was perhaps the last year of a “housing slump” that began in 2009 as the housing bubble burst nationally.

But 320 homes were built in 2013, and 505 new homes were built in the city in 2014, he said. In the first three months of 2015, 150 new homes had been built, Earp said.

Housing diversity has been a problem city leaders have been trying to address in recent  years. The city has many homes priced affordably for middle-class, first-time homebuyers, but it lacks a housing product that serves
higher-paid individuals, city leaders said.

Homes priced higher than $300,000 are sparsely found, and a residential neighborhood carrying homes priced exclusively in that bracket does not exist.

Cypress Forest, which will be the first neighborhood in Kyle to offer such executive housing, is about a year out from beginning construction of homes, developer Brian Birdwell said.

The development—which will be at the Y intersection of West Center Street, North Old Stagecoach Road and Cypress Road—would likely be the first to offer homes priced in the high $200,000s to the mid-$400,000s, according to city officials.


As the city prepares to begin construction on its first of five roadways as part of a road bond program approved in May 2013, Earp said the city is also making it a point to dedicate more resources to regular road maintenance. Kyle, through annexations, has in recent years acquired roads that were under Hays County’s jurisdiction and not up to municipal standards, he said.

With all the development coming into the city, including retail and medical space, Lori Huey, a Kyle-based real estate agent who sells properties from Round Rock to San Marcos, said the city’s home prices will probably catch up to its northern neighbors in the next 10 years or so, but it remains an affordable option today.

But as Austin continues to grapple with a troubling affordability problem, Kyle officials should begin implementing policies so as to avoid the same pitfalls as the state capital, Cooper said.

“The city of Kyle is growing rapidly,” Cooper said. “Kyle’s civic leaders have an opportunity to act now to implement policies that ensure a safe, reliable transportation infrastructure, a wise utilization of natural resources and the development of a wide variety of housing types that are priced affordably for all Kyle residents.”