Many cities across America have been overwhelmed by the impact of the Covid-19 pandemic, with some reporting significant increases in home prices and travel restrictions limiting where people can travel to and from. The most affected areas have been hard hit by the ‘price suppression’ policy implemented by governments around the world, but the impact has inevitably trickled down to the rest of the country.
Austin, Texas has been no exception, with home prices increasing by 23% in the three months to October 2020, according to data from Sotheby’s International Realty.
Despite the challenges posed by the pandemic, home building has continued apace in Austin, with sales volumes up by 55% and average sale prices up by 15% in the third quarter of 2020, compared to the same period a year previous.
The demand for homes is being fueled by a wealth of residential property opportunities in Austin, particularly in the suburbs, as the city continues to grow and develop. While the majority of homes being built in Austin are being purchased by individuals or families hoping to move into a smaller, more affordable property, there has been a rise in corporate purchasers keen to establish a headquarters in the city. As a result, demand for corporate housing in Austin has shifted from rental to sales, as organizations look to secure the property that can be used for the long term.
Why Buy a Home in Austin?
With a population of nearly 1.81 million, Austin is the second-largest city in Texas and the 37th-largest in the United States. It is also the capital city of the state, a hub for higher education, and a center for cultural activities and innovation. Additionally, as the most affected area by Covid-19 in Texas, the city has embraced the opportunity to improve and extend its health care and testing capabilities, providing crucial services for individuals and businesses hoping to return to function in the ‘new normal’.
The affordability and desirability of residential real estate in Austin are amplified by the fact that the property market has not been affected by the pandemic to the same extent as in other cities. Home prices are up, but not to the dizzy heights they reached before the pandemic, with distressed sales far outnumbering those in the pre-pandemic period.
The demand for quality, affordable homes in Austin is being fueled not only by a large population of individuals who can afford to purchase the property themselves but also by a growing number of wealthy families looking to purchase a second residence in the city. The demand has not only seen an increase in interest from non-traditional buyers but has also encouraged more established individual or family purchasers to consider a re-sale to take advantage of anticipated price reductions. Interested parties should examine the variety of property opportunities available in Austin, particularly in its bustling suburbs, before committing to purchase.
Home Building Costs More
Although the overall cost of home building in Austin has decreased over the past year, the process has become more expensive than normal as a result of the pandemic.
Builders in Austin have had to heavily bill clients for the privilege of constructing a home, with the average cost per square foot increasing by 13% in the third quarter of 2020, compared to the same period a year before. However, as demand for new homes has picked up, costs have begun to decrease, with weekly home builders’ costs decreasing by 7% in the third quarter of 2020.
