Austin, TX, is much more than the state capital. It’s a rapidly growing city. Since 2010, Austin has gained more than 200,000 residents. Known as “The Live Music Capital of the World”, Austin has become one of the most popular cities in the US to live and work. The rapid growth, plentiful jobs and rich cultural scene means that the Austin real estate market is hotter than ever.
How the Austin Market Performed in 2020
At the beginning of 2020, economists, real estate agents and investors predicted that Austin would be the most popular real estate market in the nation. By the end of December, those predictions were proven to be correct. According to Zillow, Austin home pricing rose by an astounding 23.6% in 2020 compared to 2019. This was the largest increase out of the top 50 real estate markets in the United States. When investors, real estate agents and economists were surveyed in 2021, 84% of them stated that they expect Austin to outperform the national average again in 2021.
Factors Affecting Austin House Pricing
The fast rise of prices for Austin homes is intertwined in several factors, some of which pre-date the COVID-19 pandemic. There has been an influx of people into the Austin area in the past decade. They all want an Austin home to call their own. The migration of people into Austin means more competition for existing homes. People who earn a good salary and those who may have sold their homes in a pricier market can afford to bid higher than a home’s asking price. Another factor is the rate of building new housing units. Developers simply can’t keep up with the demand for single-family homes. Severe weather events caused supply and logistical problems for builders. More recently, the COVID-19 pandemic has affected the Austin housing market. Fewer people listed their homes for sale, and more people hunkered down where they were. Historically low interest rates, low inflation and the surge of Millennials looking to buy their first homes are also leading to a growing demand for Austin homes.
What to Expect in Austin Real Estate for 2021
The availability of vaccines for COVID-19 are providing a strong boost to the local economy. People are more comfortable putting their homes for sale. Developers are getting back to work constructing new housing units, and more should be completed in 2021 than in 2020. Widely considered to be a technology, research and development hub, Austin’s economy is expected to make a great recovery in 2021. That will also spur an increase in the demand for housing and Austin home prices. The New York Times recently reported that Austin is the top destination for people leaving San Jose and San Francisco, CA. Austin’s family-size homes, sunny weather and booming economy are all solid reasons why Austin is likely to hold the number one ranking for hot real estate markets again in 2021.