A lot is going on in the U.S. housing market right now. We have seen a sustained period of growth and meteoric home sales in regions across the country, but this can’t last forever. Rising interest rates and an economic downturn have led many to predict a real estate crash. However, it isn’t all doom and gloom in the U.S. market.
Texas’s real estate market has thrived throughout the pandemic. The lower cost of living and business opportunities have driven huge growth in sales and a rise in home values. Let’s look at how two of Texas’s most important cities, Austin and San Antonio, are currently performing as the U.S. market comes back down to Earth.
Austin
Austin has been one of the hottest markets in the United States for years. The lower cost of living in Texas and Austin’s new status as a tech and commerce hub have made it one of the most desirable cities to live in the country. That has naturally driven housing prices up at an astounding rate. Even as the U.S. housing market starts to cool, Austin remains a red hot market.
According to Redfin, the median sales price for a home in Austin in May was about $680,000. This was a record for the city and around a 16% increase from May 2021, so the value of a home in Austin remains incredibly high. Homes spent a median of 27 days on the market, so they are snatched away very quickly. These statistics indicate that buyer demand is still incredibly high and that Austin remains a market that will be strong going forward. However, there are still some indicators of the current conditions impacting the Austin area.
For instance, home sales have slowed down. 1,338 homes sold in Austin in May, which was about 10% less than May 2021, and less than May 2017, 2018, and 2019. While the values of homes in Austin remain the same, the willingness and capability of buyers to purchase these homes may be declining.
There are a lot of reports stating that Austin’s market may be likely to experience significant changes over the next few months, but the fact remains that home values are strong. Austin’s market has been hailed as one of the United States’ hottest for several years now, and while there may be changes on the horizon, it remains strong.
San Antonio
While it hasn’t been as popular of a market as Austin, the San Antonio real estate market has been surging, consistently growing for years now. It is a booming city with a large economy and a great local culture. With a large and growing population, it is one of the most affordable big cities in the United States, making it a popular destination for homebuyers. This has driven prices up substantially.
According to a report by Norada, the median price of a home in San Antonio in April was $338,700. This marked a 23% increase from April 2021. That is substantial growth that shows buyers are willing to invest more toward a home in the city. The population growth of San Antonio has made that almost a necessity.
However, similar to Austin, sales are decreasing while prices continue to rise in the city. There was an 8% decline in single-family home sales year-over-year, according to the same Norada report. So while buyers are still willing to pay higher prices for a home in San Antonio, there are fewer people purchasing homes in the city than in previous years at the same time. Data from Redfin shows that the number of homes sold in April was less than in April 2021, 2019, and 2018.
This doesn’t foretell some imminent decline in the real estate market. But the economic conditions are inevitably impacting the ability of the average person to pay for a home. With concerns over an impending recession and rising inflation and interest rates, people may be more tentative than they were previously to invest in a home. Still, the San Antonio market remains strong with a lot of growth potential, much like the Austin market.
