AUSTIN, Texas — The Austin housing market boomed throughout 2020 and it seems that trend is not going to change anytime soon.
According to a report by Zillow, Austin is expected to be the No. 1 housing market in 2021.
Zillow surveyed a large panel of economists, investment strategists and real estate experts, who say home values in these metros are expected to grow faster than the nation by the largest margin:
- Austin, Texas
- Phoenix, Arizona
- Nashville, Tennessee
- Tampa, Florida
- Denver, Colorado
“During the pandemic, I think a lot of people spending a big portion of their paycheck on rent or mortgage in cities like New York and San Francisco started working from home and suddenly had options. Their dollar goes a lot further in the South, the climate is better, and Austin has a lot to offer – from the food scene to outdoor activities and live music,” said Thomas Brown, a Zillow Premier Agent in Austin and CEO of The Agency Texas. “Those factors are going to continue drawing people into the Austin market in 2021.”
This is the second year in a row that Austin would claim the top spot in Zillow's housing market survey.
KVUE spoke to Chris Glynn, the senior economist for Zillow, about this most recent report.
"Well, one of the demographic trends that we observed nationwide is that millennial and Gen-Z buyers are aging into peak years of homeownership. And so, there's this national wave of first-time buyers coming towards the housing market. And Austin has certainly benefited from that," Glynn said. "And when you look at things that millennials and Gen-Z buyers might care about, whether it's live music or [a] great food scene, Austin certainly stands out as an affordable entry point and a great destination for some of these demographics and demographic generations that are buying homes right now."
Glynn added that working from home, specifically in Austin, could also have potentially played a role in the city's home sales doing so well.
"Well, one of the things that's happened in Austin is that it already had a very hot housing market coming into 2020, and the pandemic has accelerated some of that," he said. "And so with interest rates so low and work from home opportunities, particularly for tech workers – and what we call 'the great reshuffling,' which is a, a phenomenon where families and households are reevaluating their housing needs, whether it be an extra Zoom room or an extra Zoom office or just extra living space – it's created this opportunity for households to reevaluate their housing needs. And if you're looking at what you can get for, for your dollar relative to places in New York or D.C. or L.A., Austin really stands out as an attractive option."
Zillow's 2020 survey of housing markets in America was accurate in terms of predicting Austin's spot at the top, the report stated. According to the report, by mid-December, the median list price for homes in the Austin metropolitan area was up 23.6% year-over-year – the largest rise among the 50 largest U.S. markets.
Earlier this month, KVUE also reported on the boom of luxury home sales in Austin. According to the latest Texas Luxury Home Sales Report, sales of homes worth $1 million or more increased nearly 24%. Austin is outpacing every other major Texas city. It takes on average 71 days to sell one of these luxury properties in Austin, compared to 78 in Dallas, 79 in Houston and 133 in San Antonio.
Home sales in the Austin area are soaring, with most people in the lower price points receiving multiple offers. One agent told KVUE a home recently sold in the Brushy Creek area in the $300,000 range and ended up with 93 offers. Realtors said most of the luxury buyers are coming from out of state – places like California.
Zillow reported that 84% of those surveyed said home value growth in Austin would out-perform the national average, compared to just 9% who said they believed it would fare worse. Read the full Zillow report here.
For more KVUE coverage of Austin's growth, visit kvue.com/boomtown2040.
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