We will discuss the latest Austin real estate market trends & prices and find out how they can affect the investors and homebuyers in the latter half of 2020. Austin housing market has been impacted by the pandemic which led to a decline in home sales due to critically low levels of housing inventory. As sellers backed out amid growing uncertainly and health crises, the Greater Austin area continued to feel the stark effects of this crisis. After two months of sharp declines, home sales in the Austin-Round Rock MSA rebounded this June with a 9.3% increase year over year, which helped hold sales to only a 5.2% decline during the first half of 2020.
Despite being impacted by the COVID-19, the Austin housing market remains extremely competitive and tight across the five-county Metropolitan Statistical Area, according to the data released by ABoR. The total sales dollar volume in the Greater Austin housing market (five-county MSA) experienced a double-digit y-o-y increase of 13.1%, which amounted to $1,674,070,282. In the first half of 2020, homes sales in the Austin-Round Rock MSA declined 5.2% year over year to 17,043 home sales.
Sales dollar volume declined 1.9% to $6,897,765,107, while the median price increased 4.9% to $325,200. So far this year, new listings declined 7.5% to 22,744 new listings; active listings dropped 19.2% to 5,616 listings. However, pending sales slightly increased by 2% to 20,389 pending sales. The complete “AUSTIN HOUSING MARKET REPORT” is given below.
Let’s discuss a bit about Austin before discussing why you’d want to invest in its real estate market in 2020. Austin is a minimally walkable city in Travis County with a population of approximately 790,195 people. It is the capital of Texas and it is growing at a fast clip. It is the fourth largest city in the state of Texas. The Austin real estate market isn’t the largest in the state of Texas, but there are several reasons to consider buying real estate in this city. The Austin housing market has gained a lot of steam, with home values almost doubling since 2010.
It isn’t as big as Dallas, San Antonio or Houston. However, the Austin housing market is sizable – it is the eleventh largest city in the U.S. as of this writing, and it is the center of a large metro area. Austin has come up as another tech hub in the last 5 to 6 years. There are tons of high paying tech jobs moved to Austin in the last couple of years. The Austin-Round Rock metro area is home to about two million people. Recently Austin was ranked eighth for the best real estate markets, topping all other big Texas cities.
According to ABoR, Austin’s competitive housing market is changing the landscape of traditional homeownership. More homebuyers purchase condos and townhomes in an effort to live closer to the urban core or stay within their budget. Austin has a record of being one of the best long term real estate investments in the U.S. over the past 10 years. Last December, the median home price increased 8% year-over-year to $405,093.
The Austin real estate appreciation rate in the last quarter was around 0.83%, which amounts to an annual rate of 3.36%. However, it is quite unclear whether it would remain steady or not due to the short term effects of the ongoing pandemic. Economic uncertainty may hold back sales volume in 2020. However, Austin’s engine of job and population growth is not projected to slow down anytime soon—the biggest drivers of residential real estate demand. Its economy has diversified and strengthened over the past two decades.
All these factors indicate that this region has a higher probability of withstanding economic downturns due to the current pandemic. In this article, we shall discuss some more important reasons why you may want to consider buying Austin investment properties in 2020. Let us discuss some more housing market trends which make investing in Austin real estate potentially profitable for new investors in the long term. Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving.
Austin Housing Market Prices, Trends & News 2020
We shall now discuss some of the most recent real estate trends & news in the Austin area and compare it with the past couple of years. We shall mainly discuss median home prices, inventory, economy, growth, and neighborhoods, which will help you understand the way the local real estate market moves in this region. Austin has been one of the hottest real estate markets in the country for many years.
Austin is currently a hot seller’s real estate market – which means that the demand from buyers is exceeding the current supply of homes for sale. The pricing of homes is trending higher and is more attractive for sellers in the current phase. The shortage of supply and an increase in the demand for housing will push the prices higher. Austin’s immense population growth during the past decade has heavily impacted its real estate market.
In the last twelve months, the median price for residential homes in Austin has increased by a whopping 14%, an all-time high.
Before the COVID-19 hit the region, it was expected that there would be declines in housing inventory in the year ahead amidst strong housing demand. The year started with a record for the month of January in terms of sales and median price. Compared to January 2019, residential home sales in the Austin area increased by 8.5% to 1,947 sales, and the median price increased 4.8% to $308,000, according to the Austin Board of REALTORS® (ABoR). Housing inventory fell to 1.6 months across the MSA due to drops in both new and active listings.
In the city of Austin, the median price for residential homes experienced a double-digit percent increase of 13.5% year over year to $384,750. Residential home sales increased by 0.6% to 638 sales and sales dollar volume increased by 8.2% to $290,628,094. During the same period, new listings decreased 10.6% to 960 listings; active listings dropped 32.5% to 1,099 listings; however, pending sales rose 8.6% to 956 pending sales. Monthly housing inventory decreased 0.5 months year over year to 1.1 months of inventory.
February 2020 market report released by ABoR showed that historically low-interest rates drove the market up despite the fear of COVID-19 cropping up in our community. There was a 6.8% increase in residential home sales in the Austin-Round Rock Metropolitan Statistical Area (MSA). While sales increased from 2,363 homes in February 2019 to 2,524 homes last month, new listings decreased 11.8% year over year and inventory dropped to 1.5 months of inventory, painting the picture of Austin’s historically competitive housing market and high demand.
Within the city of Austin, high demand and limited inventory pushed the median price for residential homes to $395,000, a 14% increase from February 2019. Residential home sales increased by 3.3% to 857 sales. New listings decreased 5.6% to 1,032 listings; active listings dropped 34% to 1,072 listings. Monthly housing inventory decreased 0.6 months year over year to 1.0 month of inventory.
Impact of COVID-19 on the Austin Housing Market
Local shelter-in-place orders that went into effect on March 24 had little impact on March’s home sales. There were declines in listing activity and pending residential sales. In March, residential sales (closed) in the five-county Metropolitan Statistical Area (MSA) increased 2.2% year over year to 3,042 sales, and the median price jumped 11.7% year over year to $335,200, according to March 2020 market report released by ABoR.
Monthly housing inventory declined 0.7 months year over year to 1.6 months of inventory, and average days on market decreased from 65 days to 54 days. The median price for residential homes in the city of Austin rose 14% year over year to $415,000, an all-time high for any month on record. Monthly housing inventory decreased 0.5 months year over year to 1.2 months of inventory.
Austin housing market report for April 2020 showed that the Austin-area home sales declined across most of the region due to the impact of local shelter-in-place orders. Sharp declines in closed sales in April were quite evident to the decline in listings activity recorded in March. Compared to April 2019, residential sales in the five-county Metropolitan Statistical Area (MSA) decreased 21.6% to 2,611 sales. Active listings continued to drop— a 7.3% decline led to 6,349 active listings by the end of April.
This drove housing inventory down further to 2.1 months in the Greater Austin area, which was 0.2 months lower than this time last year. In the city of Austin, the median price for residential homes experienced a double-digit increase of 12.3% year over year to $421,000. Residential sales decreased by 33.1% to 759 sales.
The housing market report for May 2020 released by ABoR showed that the Greater Austin area continued to feel the stark effects of COVID19, as housing inventory dropped to critically low levels of less than 2 months of inventory in Austin, Travis County, and Williamson County. Compared to May of last year, the inventory dropped to less than 2 months while residential sales in the five-county Metropolitan Statistical Area decreased 29.2% to 2,697 sales. An 18.8% decline to 6,086 active listings pushed housing inventory down further to 2 months, 0.6 months lower than May 2019.
Pending sales did turn around as a strong sign of recover— they jumped 14.2% to 4,287 sales. In the city of Austin, continued demand and limited inventory drove home prices up, as sales dropped due to fewer listings. The median price for residential homes increased 10.7% year over year to $424,050. New listings fell 18.7% to 1,348 listings, active listings decreased 13.5% to 1,684 listings and pending sales declined 4.9% to 1,216 pending sales. Monthly housing inventory decreased 0.2 months year over year to 1.7 months of inventory.
The latest Greater Austin Housing Market Report released by the “Austin Board of REALTORS®” shows that inventory remained very tight in June in the five-county Metropolitan Statistical Area. In June, Austin was again a hot seller’s real estate market. There are fewer homes on the market and strong demand, both indicating that the Austin home prices would rise in 2020. Homebuyers are still looking to buy homes amid the fear of pandemic and economic uncertainty. More sellers lowered the asking price of their homes.
Home sales in the Austin-Round Rock Metropolitan Statistical Area (MSA) rebounded this June with a 9.3% increase year over year.
Residential home sales increased 9.3% year over year to 3,969 sales, and the median price increased by 4.6% to $340,000.
Sales dollar volume also increased 13.1% to $1,674,070,282.
Pending sales increased by 33.7% to 4,737.
Housing inventory declined 0.9 months to 1.8 months of inventory.
Credits: Austin Board of REALTORS® (ABoR)
Half-Yearly Housing Market Report For The City of Austin
For the housing market limited to the city of Austin, home sales in the first half of the year decreased 13.6% year over year to 5,291 sales.
The median price rose 9.7% to $406,000.
Sales dollar volume decreased by 6.2% to $2,621,719,744.
New listings dropped 9.7% to 7,498 listings.
Active listings declined 21.8% to 1,398 listings.
Monthly Housing Market Report For The City of Austin – June 2020
There were 1,163 home sales, down 5.3% year over year.
Sales dollar volume inched up by 0.2% to $588,734,242.
The median price slightly increased by 3.3% to $407,000.
New listings decreased 5.3% to 1,448 listings.
Active listings tumbled 26.4% to 1,520 listings.
Pending sales jumped by 21.7% to 1,478 sales.
Housing inventory decreased by 0.4 months to 1.6 months of inventory.
Austin Real Estate Market Forecast 2020 – 2021
What are the Austin real estate market predictions for 2020? Austin housing market 2020 is shaping up to continue the trend of the last few years as one of the hottest markets in the nation. Let us look at the price trends recorded by Zillow (a real estate database company) over the past few years. Since 2015, the median home price in Austin has appreciated by roughly 33.6% from 301,000 to $401,999.
The Zillow Buyer-Seller Index (BSI) currently lists the current market temperature as “hot” in Austin – which is a sign of a strong seller’s real estate market. This is computed monthly. According to their index, there exists a limited supply of homes in Austin, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers.
In other words, based on the last month’s key housing market indicators, the demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations. There are fewer homes for sale than there are active buyers in the marketplace.
According to the same index, Austin-Round Rock Metro is currently a neutral real estate market. The median home value in Austin-Round Rock Metro is $342,320. Austin-Round Rock Metro home values have gone up 3.7% over the past year and Zillow predicts they will fall -1.5% within the next year.
Although this MSA has a very tight inventory the ongoing pandemic has led to balance between demand and supply. It depicts a temporary cooling-off trend. In other words, based on the last month’s key housing market indicators, current supply meets the buyer demand, giving both sellers and buyers and equal support in price negotiations. There are enough homes for sale than to mee the no. of active buyers in the marketplace.
Here is the visual representation of historical Austin home prices and the latest forecast until March 2021.
Snapshot Courtesy of Zillow.com
Here is another short and crisp Austin housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for Austin is 74% and it is predicting a positive trend. LittleBigHomes.com estimates that the probability of rising home prices in Austin is 74% during this period. If this price forecast is correct, the Austin home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
The historical change in home prices for Austin-Round Rock, TX is shown below for the three-time periods. The Austin Home Price Index has increased for the last 26 consecutive quarters (data up to 3rd Quarter, 2018). The highest annual change in the value of houses in the Austin Real Estate Market was 21% in the twelve months ended with the 2nd Quarter of 1980. The worst annual change in home values in the Austin Market was -20% in the twelve months ended with the 2nd Quarter of 1989.
The highest growth in home values in the Austin Real Estate Market over a three year period was 36% in the three years ended with the 3rd Quarter of 1985. The worst performance over a three year period in the Austin Market was -26% in the three years ended with the 2nd Quarter of 1989. For the upcoming updates, you can visit LittleBigHomes.com.
Time Period
Greater Austin-Area Real Estate Appreciation
Last 5 Years
52%
Last 10 Years
67%
Last 20 Years
193%
The question now is what happens moving forward. These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? It is quite evident that the pandemic had a major impact on home sales in the Austin real estate market. Home sales dropped sharply in April (21.6%) & May (29.2%) from the previous year as the housing market began to feel the full impact of the coronavirus outbreak and the state’s stay-at-home order. In June, the sales bounced back with a drop of only 5.3% year-over-year. The sales for July are yet to be released by ABoR.
The pandemic, however, has not had much impact on prices yet. Historically low-interest rates, tight inventory, and strong demand are continuing to favor sellers in the Austin housing market. In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Austin can become a buyer’s real estate market if the supply increases to more than five months of inventory.
And that’s not going to happen. The inventory in Austin MSA has dropped to critically low levels (1.6 months) due to a decrease in active listings. Despite an increase in pending sales in June, the new listings dropped 5.4% and active listings dropped 32.2%. It is one of the factors that affect overall sales dollar volume while simultaneously creating a very competitive and tight market which keeps the home prices from plunging.
Moreover, Austin home builders aren’t building quite as many new homes, and sellers were hesitant to list their homes during a shelter in place orders. Therefore, according to ABoR’s forecast, even if the Austin housing market ends up with a 3 to 4% decline in sales for entire year, that would still be a strong year for the region.
For sellers in the Austin housing market: It’s a good time to sell a home as homebuyers are still looking to buy homes, and fewer homes on the market mean stronger demand and increased visibility for your property. There are plenty of potential buyers amid record-low levels of inventory levels across the MSA.
For buyers in the Austin housing market: It is a great opportunity to scoop up their favorite deals due to low mortgage rates. Historically low-interest rates are a driver in the market response will continue to act as a driver despite the overall impact of the pandemic. The 30-year, fixed-mortgage interest rate averaged 3.16 percent in June, down from 3.80 percent in June 2019, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 3.09 percent, compared to 3.48 percent in June 2019.
The US Housing Market has begun to heat up with an increase in home buying despite the COVID-19 pandemic. The real estate sector has been one of the most resilient areas of the economy during the severe economic shutdown. The latest housing market trend to be seen is that the lack of supply is leading to a decline in existing home sales even though new home sales have jumped nearly 13% year over year.
Real estate market forecasts given in this article are just an educated guess and should not be considered financial advice. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control. Many variables could potentially impact the value of a home in Austin in 2020 (or any other market) such as big changes in the distressed, new-construction, or luxury home segments. There are also a wide variety of economic and political factors that can and do impact real estate markets. Most of these variables are difficult to predict in advance.
Austin Real Estate Market: Where To Find Homes For Sale?
If you are a home buyer looking to find homes for sale or rent in Austin we recommend you do that online or hire a local real estate agent. There are many sites where you can find homes available for sale on the market. Austin housing market has a mixture of owner-occupied and renter-occupied units.
As per Neigborhoodscout.com, a real estate data provider, one and two-bedroom single-family detached homes are the most common housing units in Austin. Other types of housing that are prevalent in Austin include duplexes, rowhouses, and homes converted to apartments.
Single-family homes account for about 46% of Austin’s housing units. In the Austin-Round Rock MSA, the median price for single-family homes increased by 2.6% to $318,000 in 2019. In December 2019, sales volume in the Greater Austin area increased by 9.2% to 2,608 sales, while inventory decreased by 0.5 months to 1.7 months of inventory. Growing demand pushed the median price of Austin single-family home to $323,000, a 7.1% increase from December 2018.
At the national level, the single-family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single-family rental units. With 2020 being, theoretically, in the middle of a boom, there are still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.
As we write this, there are 1421 homes for sale in Austin, TX on Zillow. Additionally, there are 748 homes for rent. Under potential listings, there are about 1 Foreclosed and 2 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
The median list price per square foot in Austin is $232, which is higher than the Austin-Round Rock Metro average of $159.
The median price of homes for sale is $405,000.
The median rent price in Austin is $1,750, which is higher than the Austin-Round Rock Metro median of $1,700.
There are currently 4769 homes for sale and 9146 homes for rent in Austin, Texas on Realtor.com, a real estate listings website. As we write this, the newly listed homes are 587. According to their statistics, in June 2020, Austin was a seller’s real estate market, which means there were more people looking to buy than there were homes available for sale. The demand of housing outpaced the supply.
Ideally, a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in Austin have managed to hold good leverage in these negotiations in the past month. On average, they could sell homes for 100% of the asking price. A seller would always prefer scenarios that can yield a ratio of 100% or higher. The median list price of homes in Austin, TX was $465K in June 2020, trending up 6.9% year-over-year. The median listing price per square foot was $249.
Graph Credits: Realtor.com
Austin Real Estate Foreclosure Statistics 2020
Here are some foreclosure statistics of the Austin real estate market. As per the Austin foreclosure data by Zillow, the percent of delinquent mortgages in Austin is 0.4%, which is lower than the national value of 1.1%. There are currently 86 properties in Austin, TX that are in some stage of foreclosure (default, auction or bank-owned) while the number of homes listed for sale on RealtyTrac is 723. In June, the number of properties that received a foreclosure filing in Austin, TX was 33% lower than the previous month and 85% lower than the same time last year.
Potential Foreclosures in Austin
86 (RealtyTrac)
Homes for Sale in Austin
723
Recently Sold
10,019
Median List Price
$460,000 (4% rise vs May 2019)
According to RealtyTrac, currently, in Austin, the zip code with the highest foreclosure rate is 78736, where 1 in every 3306 housing units is foreclosed. So, you’d find a lot of distressed sellers in this area and get some discounted off-market deals. 78723 zip code has the lowest foreclosure rate, where 1 in every 13,777 housing units becomes delinquent.
Austin Real Estate Investment
Now that you know where Austin is, you probably want to know why we’re recommending it to real estate investors. Should you consider Austin real estate investment? Many real estate investors have asked themselves if buying an investment property in Austin is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers in 2020.
Although this article alone is not a comprehensive source to make a final investment decision for Austin, we have collected ten evidence-based positive things for investors who are keen to buy an investment property in Austin. Texas is unique for having a biannual legislature. They don’t have the state legislature in town year-round. Instead, they are only in session several months every two years. This leads to an influx of legislators, reporters, and lobbyists every other year. This creates a unique but predictable boom and bust for the Austin housing market in the vicinity of the capitol building. Let’s look at the state of the Austin real estate market and the factors driving the market in the short and long term.
Is Austin Housing Market In A Bubble?
Austin is one of only eight U.S. metro areas to have fully recovered in the last 10 years to pre-recession values. Would Austin remain as one of the top real estate markets in the country or would the bubble burst? Well, Austin isn’t considered to be in a real estate bubble because the demand is consistently high and inventory is very tight. This is good news for investors because you can expect steady activity and the flow of people looking for housing.
In 2019, Austin continued to rank high on “Best of U.S.” lists. There was a record number of home sales in 2019. The December and Year-End 2019 Central Texas Housing Market Report reflects a record-breaking 33,084 home sales and $13B in sales volume. According to the Austin Board of REALTORS® (ABoR), between 2010 and 2019 the home sales have increased by 84%. The median home price in Austin has increased from $193,520 in 2010 to $318,000 in 2019, and the market is not showing signs of slowing down in 2020.
The price of Austin properties declined following the 2007 peak while prices remained relatively flat following the 1995 and 2000 peaks. According to a report published in Williamskw.com, Austin will remain a seller’s market. The National Association of Realtors (NAR) suggests a “balanced” market is between 4-6 months of inventory. The entire Austin market is around 2.5 months. Austin inventory levels and the number of days a home is listed for sale are increasing, yet not nearly enough for Austin to be a “buyers” market. That is not expected to change.
As Austin is a young city by many standards, Millennials will be the largest buying force in Austin in the upcoming years. This is going to be more attractive for the areas being close to neighborhood amenities and close by shopping & hang out spots. Real estate industry experts think that there is no bubble. Austin’s economy is strong and varied. Overall there is a huge scarcity of homes for sale in Austin. It just hasn’t kept up with the pace of people moving here.
Austin’s Affordable Real Estate
Homes in Austin are 23% cheaper than the national average. It may be the second most expensive housing market in the state with a median home price of around $350,000, but it is still far cheaper than California or New York. Buy up condos or townhomes, and you’ll be able to see a sizable return on the investment. For example, studio apartments rent for around $780 in Austin versus the $700 national average, while an Austin 1 bedroom apartment rents for almost a $1000 though the national average is $825 a month. A three-bedroom apartment in Austin rents for $1500-$1600 while the national average is closer to $1400 a month.
Certain Future Appreciation for Austin Real Estate
An author in Forbes wrote in 2016 that Austin real estate is appreciating at one of the highest rates in the state because of NIMBY-ism, a reluctance to develop riverfront or Texas hill country to build new homes. This has pushed development out along the highway and forced dense development in areas already zoned for housing. This pushes up the price for existing homes, driving many in the Austin housing market to rent when they want to buy, while it guarantees capital gains for those who buy and hold property. During the latest twelve months, Austin’s real estate appreciation rate, at 7.01%, has been at or slightly above the national average. In the latest quarter, Austin’s real estate appreciation rate has been 2.05%, which annualizes to a rate of 8.45%.
Here are the ten neighborhoods in Austin having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.
Pershing
E Cesar Chavez St / 1st St E
E 12Th St / Chicon St
Nile St / N Pleasant Valley Rd
Govalle Ave / Webberville Rd
E Martin Luther King Jr Blvd / Poquito St
Huston-Tillotson U / E 11Th St
Ed Bluestein Blvd / Bolm Rd
S Pleasant Valley Rd / S Lakeshore Blvd
E Riverside Dr / Montopolis Dr
Cost of living In Austin
The Austin-Round Rock metro area is home to about two million people. The city is known as a haven for live music, free-thinking, and free spirits. It has a distinct culture and flavor compared to the rest of Texas, which is a mostly conservative and traditional state. According to WalletHub, among large U.S. cities, Austin ranked eighth, topping all other big Texas cities as well as San Jose, Atlanta, and Portland. Among all 300 cities, Austin still ranked a respectable No. 36 for best real estate markets
Aside from high housing prices, the cost of living in Austin is relatively affordable. Overall, the cost of living for Austin is very reasonable. At three percent below the national average cost of living, moving to Austin may be an economical choice for you. One of the most interesting factors in the cost of living for Austin is that the cost of housing is 15 percent below the national average. According to Sperling’s Best Places, grocery costs in Austin are slightly below the national average, with a rating of 89.1 against the U.S. average of 100, meaning it is about 11 percent lower than the national average on groceries.
The sales tax rate in Austin is 8.25 percent. There are no income taxes in Texas. Schools are largely funded through property taxes, which rise along with home prices. As home prices continue to skyrocket and people are increasingly forced to move to the distant suburbs to find affordable housing, a massive reworking of Austin’s building codes, known as CodeNext, promised to deliver some relief.
The median salary in Austin, TX is $51,596 and it is the 108th most expensive city in a database of 232 cities by NerdWallet.com. For a 2-bedroom apartment, the median rent per is $1,184. The median price for a 3/2 bedroom house is $276,634. Food and entertainment costs in Austin are reasonable. Redwood Austin is the area with the lowest cost of living.
Areas With The Lowest Cost of Living in Austin – (List by Niche.com & prices by Livability.com)
Redwood, Texas – Located in Guadalupe County. The median income in Redwood, TX is $47,778 and the median home value is $54,700.
Lockhart, Texas – Located in Caldwell County. The median income in Lockhart, TX is $48,884 and the median home value is $115,400.
Martindale, Texas – Located in Caldwell County. The median income in Martindale, TX is $43,929 and the median home value is $151,200.
Uhland, Texas – Located in Hays County. The median income in Uhland, TX is $40,662 and the median home value is $78,100.
Taylor, Texas – Located in Williamson County. The median income in Taylor, TX is $42,793 and the median home value is $116,600.
Lago Vista, Texas – Located in Travis County. The median income in Lago Vista, TX is $75,126 and the median home value is $189,400.
Elgin, Texas – Located in Bastrop County. The median income in Elgin, TX is $50,369 and the median home value is $104,000.
Hornsby Bend, Texas – Located in Travis County. The median income in Hornsby Bend, TX is $49,077 and the median home value is $123,000.
Round Rock, Texas – Located in Williamson County. The median income in Round Rock, TX is $72,412 and the median home value is $179,900.
Wimberley, Texas – Located in Hays County. The median income in Wimberley, TX is $59,167 and the median home value is $214,600.
Austin’s Massive Student Population Propels The Rental Investment
Many people want to invest in the Austin real estate market because there is a massive student population that will rent properties for a premium if they’re in easy commuting distance of the University of Texas Austin campus. That school alone has more than 40,000 students. The Austin community college hosts about as many students as UT Austin. Huston Tillotson University, Saint Edward’s University, and National American University are also located in this city.
Positive Demographic Momentum of Austin: About half of Austin’s population is between 18 and 44, though that figure is skewed by the large student population. However, the reality is that many college graduates choose to stay here because of the abundant, well-paying jobs. After all, Austin has the highest per capita of high paying jobs of any Texas city. This helps explain why the Austin housing market is growing at the fastest rate of any major city in Texas. Many of these young adults are starting their families here, creating certain future demand for housing in the Austin real estate market.
Rental Market Statistics: The average rent for an apartment in Austin is $1,439, a 5% increase compared to the previous year. According to RENTCafe, 48% of the households in Austin are renter-occupied which is a significant population. More than 65% of the apartments can be rented for $1,500 or less. Around 20% of the rental apartments fall in the price range of $1,500 to $2,000 while only 10% of the apartments fall in the rent price range of $2,000 or more.
The average size for an Austin, TX apartment is 864 square feet with studio apartments being the most affordable. 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage.
These are some of the most affordable neighborhoods where the rent prices are below the Austin average rent of $1,439/mo:
Johnston Terrace, where the average rent goes for $1,061/month.
Georgian Acres, where renters pay $1,110/mo on average.
Harris Ridge, where the average rent goes for $1,110/mo.
Heritage Hills, where renters pay $1,110/mo on average.
Windsor Hills, where renters pay $1,110/mo on average.
East Riverside – Oltorf, with an average rent of $1,361.
Anderson Mill – Jollyville, where apartments go for $1,250/month.
Northwest Hills with an average rent of $1,287/month.
According to RentJungle, as of July 2020, the average rent for an apartment in Austin, TX is $1496 which is a 1.47% decrease from last year when the average rent was $1518, and a 1.87% decrease from last month when the average rent was $1524.
One-bedroom apartments in Austin rent for $1306 a month on average (a 2.6% decrease from last year).
Two-bedroom apartment rents average $1642 (a 1.83% decrease from last year).
The average apartment rent over the prior 6 months in Austin has decreased by $51 (-3.3%).
One-bedroom units have decreased by $45 (-3.3%).
Two-bedroom apartments have decreased by $57 (-3.4%).
Austin Is The Silicon Prairie
Austin Texas has been nicknamed Silicon Hills and Silicon Prairie because they’ve attracted so many high tech employers. This has resulted in an active upscale Austin real estate market. Austin’s GDP, which grew 117% over the last 20 years, helped the real estate market recover from the recession. The closest metro to see this type of growth was Silicon Valley, which grew its GDP by 99% during the same period. Major local employers in Austin include IBM, Amazon, Apple, Cisco Systems, and many semiconductor manufacturers.
There are more than 3300 tech companies in the region and more than 100,000 tech workers all competing for homes in the Austin real estate market. One of the long-term strengths of Austin is its diverse economy. The Austin real estate market dipped after the layoffs of the Dot-Com boom. They decided to solve the problem by encouraging medical and biotech employers to relocate to the area, too. As of this writing, there are 85 biotech and pharmaceutical companies in Austin.
Quality of Life in Austin
One of the factors driving the Austin real estate market is the intangible but well-documented quality of life the city provides. In 2017, US News and World Report ranked the city first for quality of life. In 2016, Austin was ranked first on a Forbes list of Cities of the Future list. In 2017, that same magazine ranked the South River City neighborhood as one of the best for Millennials. WalletHub ranked the city sixth in their list of best places to live in 2017. In 2012, the FBI ranked Austin as one of the safest cities in the country.
Austin is Relatively Friendly City for Landlords
Texas, in general, is very landlord-friendly, though cities can have their own, stricter ordinances. Texas doesn’t specifically let tenants withhold rent for failure to provide essential services. You can evict someone for nonpayment of rent after three days. Texas doesn’t set a limit on security deposits. Texas doesn’t require a minimum time frame before you increase the rent. For major lease violations, you can terminate the lease then and there and give them three days to vacate. Knowing you won’t spend months trying to evict a non-paying tenant is a good reason to consider the Austin real estate market or another Texas housing market over more liberal cities.
The Excellent Tax Environment
Texas’ property taxes may be high, but this is offset by the lack of a state income tax. There is, overall, a low state and local tax burden for investors. That makes this a great place to buy a home and rent it out.
Austin | Texas Investment Properties: Where To Buy?
With Austin becoming a more diverse city every year, there are plenty of opportunities to take advantage of – from buying new homes to different investment options in the Austin real estate market. Austin is a leader across the country with jobs and when you combine that with home prices not as drastically increasing, you’ll get a real estate market that many others envy. Good cash flow from Austin investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt.
Therefore, finding the best investment property in Austin in a growing neighborhood would be key to your success. As with any real estate purchase, act wisely. Evaluate the specifics of the Austin housing market at the time you intend to purchase. When looking for the best real estate investments in Austin, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing.
Some of the popular neighborhoods in and around Austin are Northwest Hills, Downtown Austin, West Lake Hills, Brushy Creek, Barton Creek, Spicewood Summit, Mueller, South Austin, Hyde Park, Windsor Park, Crestview, North Austin, Allandale, Shady Hollow, Rollingwood and Steiner Ranch.
There are around 75 neighborhoods in Austin. Tarrytown has a median listing price of $1.4M, making it the most expensive neighborhood. West University is the most affordable neighborhood, with a median listing price of $279.9K (on Realtor.com).
Downtown is where the city’s high rise buildings are located, as well as being the center of government and business for the region. Downtown Austin is expanding and the residential options are increasing. The cost of real estate might be the highest in Austin, but residents live within walking distance of everything they need. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Austin.
Consult with one of the investment counselors who can help build you a custom portfolio of Austin turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Austin.
Not just limited to Austin or Texas but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Austin turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
Is It The Right Time To Invest In Real Estate? – The national homeownership rate is on the decline for the first time since 2017. As demographics change and baby boomers retire, you’re seeing Millennials who may not be ready to buy houses. In 2018, Millennials made up about 22 percent of the population in the United States. They’re choosing to rent over buying a single-family home or an apartment. Rising home prices and shortage of starter homes have not left Millennials many choices but to delay homeownership. Moreover, it’s even harder to take out a mortgage for those who have student loan debt.
Apart from the Austin real estate market, you can also invest in the housing market of Houston, TX. If you are a home buyer or real estate investor, Houston has a track record of being one of the best long term real estate investments in the nation through the last ten years. The Houston Real Estate Market forecast is good, and current housing prices are relatively low, so if you want to get on board the Houston real estate investing then now would be a great time to do so. The Houston metro area offers great opportunities for investors who are looking for a stable market that offers both cash flow and equity growth at a price that is STILL well below their replacement value.
The El Paso real estate market is another hot market to invest in. El Paso real estate market was ranked at 4th in Trulia’s hottest real estate markets to watch in 2018. El Paso’s strong job growth, affordability, low vacancy rates, and a high population of the young household were pivotal in the ranking process. The cost of living in El Paso is lower than the national average, while the cost of housing is well below that of other major metropolitan areas, including Houston and Austin.
The Central, Cielo Vista and Mesa Hills areas offer more affordable rental properties for sale, while neighborhoods in the northwestern and eastern parts of the metro area have some of the more expensive housing inventory. The amount residents spend on everyday expenses, such as food and transportation, is slightly less than what the average American pays.
The next one is the San Antonio real estate market. The median home value in San Antonio is $184,322. San Antonio home values have gone up 4.8% over the past year and Zillow predicts they will rise 1.9% by Dec 2020. For those who want to invest in rental real estate, the San Antonio real estate market is an ideal location because of the outsized military presence. Fort Sam Houston is located inside the city limits. Lackland Air Force Base, Randolph Air Force Base, Camp Bullis, and Camp Stanley are located in the immediate vicinity.
This means that there is a large population that will almost always rent because they don’t know where they’ll be sent on their next assignment. San Antonio has a dearth of affordable housing because demand is so much greater than the supply. This has created a large number of renters who need to pay quite a bit to rent apartments or single-family homes. We know there is a lack of housing relative to demand when a balanced market has a 6 month home inventory and San Antonio has only a two-month inventory.
How can we not mention Dallas on this list? The Dallas housing market 2020 is shaping up to continue the trend of the last few years as one of the strongest markets in the United States. Despite some fluctuations in the market, demand and sales have continued to climb at a feverish pace for more than two years and show no signs of stopping. Dallas’s local economy is a mix of aerospace, computer chips, telecommunications, transport, energy, and healthcare sectors and the Finance and Business Services. These sectors are all providers of good wages which allows for a strong market for Dallas investment properties.
Dallas’s population has grown at twice the national rate for years now and this pushes the prices of Dallas investment properties higher due to builders not being able to keep up. Dallas’s housing prices have increased 29% over the last three years, even with these increases in home prices, they are still competitive for investment properties and you can expect further increases over the years. If you want to buy an investment property in Dallas, don’t wait around, go ahead and do it.
Let us know which real estate markets in the United States you consider best for real estate investing!
Please do not make any real estate or financial decisions based solely on the information found within this article. Some of the information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US. This article aimed to educate investors who are keen to invest in Austin real estate. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend doing your research and take the help of a real estate investment counselor.
References:
Market Data, Reports & Forecasts
https://www.abor.com/category/press/market-stats
https://www.zillow.com/austin-tx/home-values
https://www.realtor.com/realestateandhomes-search/Austin_TX/overview
http://austin.culturemap.com/news/real-estate/08-30-18-austin-home-foreclosures-rise-report
Foreclosures
https://www.realtytrac.com/statsandtrends/tx/travis-county/austin
Apartment Prices & Trends
https://www.rentcafe.com/average-rent-market-trends/us/tx/austin/
https://www.rentjungle.com/average-rent-in-austin-rent-trends/
Reasons to consider investing in Austin
https://www.austintexas.gov/invest-here
https://www.usnews.com/best-colleges/university-of-texas-3658
https://www.collegesimply.com/colleges/texas/austin/four-year-colleges/
https://www.rentcafe.com/blog/renting/states-best-worst-laws-renter
http://austin.culturemap.com/news/real-estate/09-11-18-best-real-estate-markets-in-us-austin-wallethub
Is Austin In A Bubble
https://www.quora.com/Is-the-Austin-real-estate-market-a-bubble-If-so-when-will-it-burst
https://www.williamskw.com/blog/5-Predictions-for-the-Austin-Real-Estate-Market-in-2018/53486
Cost of Living
https://livability.com/tx
https://www.tripsavvy.com/austins-cost-of-living-255111
https://www.bestplaces.net/cost_of_living/city/texas/austin
https://www.nerdwallet.com/cost-of-living-calculator/city-life/austin
https://www.niche.com/places-to-live/search/suburbs-with-the-lowest-cost-of-living/m/austin-metro-area
https://www.forbes.com/sites/scottbeyer/2016/08/31/why-is-austins-housing-more-expensive-than-other-texas-cities/#10556d3d6121
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