Growth, growth, growth. The word seems almost synonymous with Austin real estate these days.
Record home sales despite historically high prices, a push for major mid-income development and, you guessed it, more signs of future growth dominated the Austin area real estate headlines in January.
Here are January’s hottest real estate stories.
If You Build It, They Will Come
Homebuilders will likely start to put up 12,000 new houses in the Austin area in 2015, according to a report in the Austin American-Statesman. An increasing in building isn’t a huge surprise given Austin’s booming population and low housing inventory. But rising costs mean more builders will target price points below $250,000 and cut back on pricier homes. That was the upshot of Eldon Rude’s 2015 housing forecast event in conjunction with the Home Builders Association of Greater Austin.
And It’s Not Only True in Austin — Cedar Park is Booming, Too
Tom Gaglardi, owner of the Dallas Stars National Hockey League team and the Texas Stars American Hockey League team, said he is eyeing major developments near the Texas Stars’ home ice at the Cedar Park Center, according to a story in the Austin Business Journal. That news comes after the latest U.S. Census update that showed Cedar Park is the nation’s 4th fastest-growing city.
Luxury Home Sales Increasing in Austin
Luxury homes are selling faster than they did last year, according to a new study reported in the Ausitn Business Journal. The city logged 479 sales between January and October of homes valued at more than $1 million — that’s a 9 percent increase from the same period in 2013. The report, created by the Real Estate Center at Texas A&M University, also showed it takes 161 days, on average, to sell a luxury home in Austin — about four times more than an average house.
Austin’s New Mayor Gets to Work
Austin’s new mayor, Steve Adler, soaked up the praise and applause at a recent Austin Board of Realtors grand opening celebration. Adler had ABoR’s backing in his recent election win over Mike Martinez. Adler has promised to push for a 20 percent across the board homestead exemption. That would provide property tax relief for homeowners, but it would cost the city $36 million a year that would have to be made up by cutting services or raising tax rates. The Austin American-Statesman reported that the city estimates the proposed exemption would cut city taxes of a median-value home, worth $196,000, by $190. About 130,000 Austin homeowners would be eligible.
Risk-Free Prediction: Austin Area Rental Rates Will Rise in 2015
It’s not exactly going out on a limb in Austin, where the ever-rising cost of real estate has become the city’s top issue. But the Austin Business Journal reports that Berkadia, a brokerage specializing in multifamily housing, predicts rents will climb 4.5 percent in 2015 to an average monthly rate of $1,185. The low vacancy rates and increasing rents are attractive to many investors. The Berkadia report says that speculators are snatching up older apartment buildings, improving them at the rate of about $15,000 per unit and upping the prices by $100 or more per month. That will be another log to toss on the raging fire of a debate over Austin’s cost of living. For more on that, consider the Real Estate Council of Austin’s white paper on affordability that calls for increased density in building and 100,000 new housing units in Austin by 2025.