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Hi Austin Texas, it is time for your housing market update for the week of January 23rd, 2023.
We’re doing something different today and focusing on County Information for Austin’s 3 counties: Williamson County, Hays County and Travis County.
Briefly, Real Estate is a lagging economic indicator that looks backwards and forwards to understand the market.
2023 is off to a big start with the last 3 weeks steadily showing housing inventory 8100-8600 homes for sale as follows:
- 47%+ of homes for sale in Austin are less than $500,000.
- 26%+ of homes for sale in Austin fall between $750,000 and $1,000,000,
- 9%+ of homes for sale in Austin fall between $1,000,000 and $2,000,000.
- 2%+ of homes for sale in Austin fall between $2,000,000 and $3,000,000.
- 13%+ of homes for sale in Austin are over $1,000,000.
Even though real estate prices may be down overall, our market is still thriving as witnessed by the activity of home sales which we’ll post in our weekly data chart below.
For Homebuyers that didn’t buy and 2020, 2021, 2022 it’s a good thing to see things stay stable and stay level, right.
Real Estate Report Card: Hays County, Williamson County, Travis County
Which of the 3 Counties Do We Estimate Will Have an Uptick?
If you are not from Austin, Texas, here’s a couple of things you need to know.
We are a combination of three different counties.
Why Buy in Travis County?
We’re forecasting that it actually comes down to median home price by 0.45%. Flat over the next five years.
Appreciation, forced savings and seriously our continued demand is insane.
Even with announcements of some companies having layoffs and other companies going full steam ahead, our demographics insures the continuation of a Seller’s market forever
Travis County Demographics
Travis County demographics for Home Buyers are some of the strongest in the country.
A majority of Travis County is the 27 to 35 year old and that’s the newer demand we’re seeing. This is new demand. These are new buyers that are not selling anything. They’re not bringing any new inventory to market.
We’re expecting 25,000 household formations per year. If just 54% of them are going to be purchasing a home for the first time, that’s almost 15,000 homes
Why Is Travis County Building More Than the Current Demand Requires?
We need the inventory to bring homeownership and home affordability more in line with affordability.
Affordability Index shows Travis County at 100 which means the median homebuyer with the median household income, can afford to purchase the median home with 20% down. The higher the number (over 100) is, the more affordable Travis County is. The lower the number is, the less affordable it is.
Since 2018 affordability had been coming down (even though it jumped up because of the pandemic). Since the Fed hikes went through, you can see affordability has actually gone down that. Builders continue building in Travis County because we really don’t want median home prices out of control.
Where Are Builders Building in Travis County?
Builders are building everywhere with the bigger communities continuing to bring in so many people in Lakeway and Bee Cave in particular due to the great school systems. We’re seeing growth in Manor due to industry and Lago Vista for lake life and more Hill Country lifestyle.
Downtown condominium life in Austin is creating key density in the core and also insuring that we consider infrastructure that sustains. I always say that a healthy downtown core helps insure a healthy rest of the state, especially since Austin is our State capital.
Why Buy in Williamson County?
Williamson County offers a relatively more affordable median home price.
Over the next five years, we’re actually expecting it to go up 6.36% which if we compare that with Travis County 5.85% Williamson County is not only more affordable today but it’s actually projected to outpace appreciation, percentage wise,
While Williamson County demographics are very different (than Travis County), the amount of inventory really isn’t all that different. It’s actually down month over month, as opposed to Travis County, a year over a year.
There’s a lot more inventory than there was for homebuyers purchasing last year. Williamson County has ( currently) a surplus of homes that are being built. This is not a bad thing in a growing market.
Affordability index is creeping down. it’s coming from a higher place than Travis County, because it was more affordable. But it’s still seeing the same thing where it’s becoming less affordable.
Median Household Income is relatively higher than, Travis County.
Why Buy in Hays County?
Hays County offers the most affordable median home price and similar historical appreciation.
We’re estimating a positive forecast over the next year – anything above zero is greater than anything below zero.
Hays County Demographics – Future Demand
The largest demographic in Hays County’s is 18 to 26 year olds – 49,000 of the 255,000 total population. So why is it expected to out appreciate the others counties?
It’s because this is the future demand!
Home values are going to continue to go up over time even if affordability comes down.
The median home price is affordable at the median home price with the current household income and a 20% downpayment at 100 Index.
In all three Austin counties we do remain above the 100 Index.
There’s not many households or many counties that you actually have a reading above 100. For the long-term, Austin and the surrounding markets in the Austin MSA are a really good investment if you’re living in Texas.
Austin is big! If you’re coming from California, you’re used to being on the PCH for hours. Or if you’re coming from somewhere else you’re likely a commuter of sorts (train or car).
Austin is a driving city. And, we don’t have snow, we don’t have snow plows, but we, we definitely have roads and we’re building we’re continuously building infrastructure. There is a train system being built as our city is growing by leaps and bounds.
More videos coming out about where each of our cities are relative to the downtown core, the airport and so much more as many people still have the ability to work from home. For tech and medical folks I’ll be including all of the information you’ll wish to know for traveling to Apple, Samsung, Tesla, Dell, Oracle and more and all our hospitals too.
New Home Construction
It is mind blowing how many people are walking in and looking at what the opportunity is to build homes right now from scratch and it’s incredible how they are trying to keep up with demand.
Media propaganda with headline reports are not signaling that the worst of inflation is in our rear view. The lower interest rates are going to come back bringing more Buyers
A lot of Buyers it is their dream to build from the ground up. And it’s a big undertaking.
I love that I love the dream.
There is so much value right now in starting with a homebuilder and either buying something that they’re currently building, where you still make it to pick out your finishes, or starting from scratch, finding the lot that works best for you and what your needs are, and then determining what the plan is that that builder can build on that lot.
While we call it “semi custom” what you can choose in your home varies depending on when you meet with a Builder for purchasing ie. picking your lot and choosing your plan and home elevation to purchasing a “Builder spec home” that they’ve already started.
Perry Homes, Scott Felder, Highland Homes, Sitterle, Drees – those are our top higher end production Builders in most of the in most of these master planned communities that I make it my business to know!
I’m talking with them consistently. I know happening for inventory and they’re doing their best to keep up with these client demands for bigger homes and for build times.
Did you know that there is still lag time from the pandemic? Things being stuck in an ocean not not always arriving as quickly as they once did. And so we’re seeing build times vary depending on the size of your house, it could be for anywhere from 8- 16 months, depending on again, all of the things that are happening from the time you read your contract.
There’s a lot of leadership on my part as you move through the process and the different phases of home building.
Pro Tip: You cannot walk into a new home builder and ask them for last year’s prices. It doesn’t work.
If you’re like Mark, who has major anxiety from all the different moving parts and pieces of new construction and you stick to purchase resale homes, then we handle that as well.
Home Purchasing Affordability
Buyer sentiment has definitely leveled off in terms of understanding affordability right now. And if we’re staying in these ranges, which are a lot back to the norms now is a great time to get pre–qualified and truly dive into monthly affordability and lifestyle considerations. The minute you have all your numbers and you’re pre-qualified you can purchase a house. But if you’re not pre-qualified and see a house you love, someone else (who is pre-qualified) may be buying it first.
As A REALTOR® I can’t take you shopping for a new home if we don’t know what is realistic for you so that you’re affording your house and you’re affording your life.
If you are thinking about moving to Austin, Texas, and you are considering purchasing semi-custom, full custom or resale home, please let’s connect.
The Jennifer S. Goodman Group is just a call or text or email away. You can reach us HERE.
Mark Karetskiy is a Mortgage Lender at Movement Mortgage. You can find him at Mark10k.com.
Thanks so much for tuning in, we’ll catch you next time!