Known as the number one place to live in America for the third year in a row, Austin Texas currently is one of the fastest growing metropolitans in the U.S. and has been reporting significant population growth over the past 15 years. It’s becoming a technology hub with tech giants like Apple recently committing to build a $1 billion dollar campus close to the Avery Ranch area. As well, Google, Amazon and Facebook are expanding operations and adding new campuses in the region. Coined as “Silicon Hills”, this city not only attracts entrepreneurs (since it’s a recognized hub for start-ups, technology and innovation) but several mid to large size corporations are beginning to move their headquarters or expand their operations to the area.
This influx of tech jobs has resulted in a surge in residential construction that includes Austin proper and several adjoining suburban cities such as Pflugerville, Round Rock, Georgetown, Leander and Cedar Park. Despite the rapid job growth, the demand for homes is outweighing the supply causing the Greater Austin Area to rank among the highest in the U.S. for rental prices. The city has also experienced some of the highest and fastest increases in median home prices over the past decade.
The large variance between the size of homes, quality finishings, lot size and location account for the stark differences in median home prices. Between 2018 and 2019, the median home value rose modestly for all home sizes in the Single Family Residential (SFR) category. For example, the median price for a 1,000-2,000 sq ft property was $225,000 in 2018 and remained stable throughout the year to set in at $229,000 by 2019.
For a 2,000-3,000 sq ft home, the median price in 2018 was $302,205, and increased to reach $310,124 in 2019. For a 3,000-4,000 sq ft home, the median price was $500,000 and increased by $10,000 to reach $510,000 in 2019. For a 4,000-5,000 sq ft home, the median price in 2018 was $720,000 and increased to $745,000 a year later. For the largest homes (measuring 5,000-6,000 sq ft) the median price in 2018 was $1,263,750 and increased approximately $135,000 to reach $1,400,000 in 2019.
Despite the hike in pricing, the number of homes sold increased approximately five per cent from 2,526 in December 2018 to 2,663 year-over-year. The number of homes for sale in December 2019 was 1,143 and the average days on market increased by two days from 124 days to 126 days year-over-year. However, these statistics reflect the higher-end properties’ segment of the market. In most cases, the majority of SFR properties in Austin in traditional subdivisions and city core locations typically sit on the market for less than 90 days.