AUSTIN, Texas — The real estate market is booming, and home prices are skyrocketing here in Austin, Texas, especially over the last several months. Families searching for homes want to know if this is just temporary or if this the new normal for Austin.
According to one real estate expert, this housing market isn’t going to improve for buyers.
Chief Economist for Redfin Daryl Fairweather said she anticipates the post-pandemic housing market in Austin becoming the new normal.
“I don’t think it’s a bubble," Fairweather said. "Bubbles pop, and I don’t see this popping."
The State of Texas, along with Austin, is seeing a rise in new residents, especially from California, according to Fairweather.
"It really is the fact that Texas homes tend to be more affordable than California homes," she said. "California has let its housing costs get out of control. And in Texas, there is still plenty of land, which has kept home prices low. But during the pandemic, there's been so much more demand, and you can't just flip a switch and create more housing overnight. So that's caused the prices of homes to really skyrocket."
She said the only solution for Austin's skyrocketing prices is to build more homes to meet the demand.
“Hopefully the government gets on top of that, gets the proper zoning in place, and Texas can build to meet the demand so home prices don’t accelerate even more,” Fairweather said.
Fairweather said she hopes taking the time to invest and properly plan these real estate developments will help the housing market eventually calm down.
According to Fairweather, people started moving from less expensive areas to “new cities they’d never thought of before” during the pandemic. Austin is one of those cities, and one of the most popular, which caused a change in the housing market.
“During the pandemic, there’s been so much more demand, and you can’t just flip a switch and create more housing overnight, so it’s caused the prices of homes to really skyrocket,” Fairweather said.
When it comes to what people moving are looking for specifically, Fairweather said large homes with big backyards are most popular with buyers. She added that during the pandemic, most buyers were willing to sacrifice living in a downtown setting for these types of homes, increasing demand for homes outside the city.
A new study from Orchard found that the ZIP codes outside of Central Austin had the most post-pandemic growth. Median home prices in Marble Falls, Burnet, Leander and Wimberley grew by 68%.
However, Fairweather said as restrictions begin to loosen post-pandemic, demand in the heart of Austin might also start to go up.
“With the economy reopening and people possibly wanting to go out to restaurants or have nightlife nearby, I think condos and multi-family homes, especially ones downtown, will start to get even more popular,” she said.
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