Austin’s Housing Market: Is It Keeping Up with the Growth?
Austin, known for its vibrant music scene, delicious food, and tech innovation, is currently facing a challenge in its housing market. Recent data suggests that while the capital city of Texas is growing in population, it’s having a tough time keeping pace with housing demand compared to its neighbor, San Antonio. Let’s dive into the numbers and see what’s happening!
Construction Boom in San Antonio
San Antonio, often seen as Austin’s little brother, is pulling ahead in the housing construction race in a big way. In the third quarter of this year, San Antonio kicked off 17,751 new homes annually, according to housing data experts at Zonda. Meanwhile, Austin trails closely with fewer than 16,663 new home starts during the same period. This indicates a 33% increase in construction for the Alamo City, compared to a modest 11% growth in Austin!
What’s Driving the Difference?
So, what’s the reason behind this notable discrepancy? Keith Hughes, the vice president of sales at Zonda, has some insights: “It’s easier to get things done in San Antonio, and homes are more affordable as well.” Those affordability factors play a crucial role, especially as home prices continue to rise across Texas.
Population Growth: A Double-Edged Sword
Both cities boast similar population numbers, but they are growing at different rates. The Austin area saw a bustling increase of 2.1% between 2022 and 2023, welcoming about 50,000 newcomers. Meanwhile, San Antonio’s population grew at a steadier pace of 1.7%, adding around 37,000 residents. Yet, despite attracting more new inhabitants, Austin is struggling to keep up with housing supply to meet the rising demand.
Home Affordability: A Major Concern
When it comes to affordability, the numbers don’t look great for Austin. Recent reports show that Austin claims the title of least affordable metro in Texas. So, what are the median home prices in these two cities? San Antonio boasts a median home price of $312,000, while Austin’s median home price is significantly higher at $425,000. This stark contrast begs the question: can Austin maintain its charm if housing remains out of reach for many?
Wider Texas and Beyond
To put things into perspective, Austin’s struggles are not just local. Across Texas, cities like Dallas and Houston are showing growth as well, but they are nowhere near matching the rapid construction pace that San Antonio has lately established. Dallas reported 46,635 housing starts—an 11% increase—and Houston came in with 38,128 starts with a 14% boost. Beyond Texas, cities like Phoenix and Miami are seeing even larger surges in construction, at 50% and 44%, respectively.
What’s Next for Austin?
Austin officials are fully aware of the mounting housing issues and are currently working on new zoning categories aimed at boosting supply in the city. But will these efforts be enough to catch up with the construction frenzy happening in San Antonio? Only time will tell!
For now, it seems that Austin has some work to do if it wants to maintain its status as a desirable place to live. With rising home prices and limited inventory, residents and newcomers might face some serious homeownership hurdles ahead. So, let’s keep a close eye on the situation!
