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David Ivy
  • Real Estate Broker
  • Austin, TX
662
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November 2018 Market Report

David Ivy
  • Real Estate Broker
  • Austin, TX
Posted Dec 19 2018, 10:05

The November 2018 Central Texas Housing Market Report is out from the Austin Board of REALTORS® (ABoR). All signs point to another record-breaking year for the Austin-area housing market. Rising mortgage interest rates, low inventory (1.9 months), and affordability challenges (median home price vs. median income) has home sales down 5.4% year-over-year in the City of Austin. However, demand for housing in the city remains strong, delivering a 5% increase in the median sales price of single-family homes to $374,900. With unemployment just under 3% and continued votes of confidence by employers such as AppleOracle, and others, analysts believe that the Austin area is one of the top housing markets to watch in 2019.

Steve Crorey, 2018 ABoR president, once again flags affordability challenges and their effects on the market: "Families and young professionals continue to move to the suburbs where there are more opportunities for home ownership at a more reasonable price point than in the city of Austin." Gross median income for a family of 4 in the Austin-Round Rock MSA is estimated to be $86,000 in 2018. The median home in greater metro area is around $300,000.

Here are basic stats on single-family home sales for November 2018 for the City of Austin and the greater Austin area:

I'm sure you're all aware of Apple's recent announcement of a massive expansion to its current campus in NW Austin. The new campus will initially employ 5,000 people and could eventually grow to a workforce of 15,000. That's in addition to the 7,000 employees associated with Apple's current campus. This certainly will bring increased demand for housing in N/NW Austin and the northern suburbs. All else being equal, the this announcement and eventual influx of well-paid, educated tech employees will produce upward pressure on rents and property values, both residential and commercial.

However, there are several things to note. First, Apple campus won't be complete and fully operational until 2021. So, it's not as though the 5,000+ initial employees will be moving here anytime soon or even all at once. Second, Austin already has a world-class tech workforce and a several universities in the area continually adding to that supply. So, some appreciable percentage of the 5,000+ employees are (or will be) already in the Austin area. Third, developers should (I hope) take an interest in meeting the increased housing demand with new housing supply.

The existing Austin campus currently employing roughly 7,000 opened in 2012. Here's a chart of the median sales price of a single-family home within a 2 mile radius of the current Apple campus over the past 10 years:

The chart shows that values took off after 2012. However, note that this isn't much different from the same chart for the greater Austin metro area over the same time period:

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