Austin named hottest housing market in U.S., but it might be a bad thing

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AUSTIN (KXAN) – A new survey conducted by the real estate company Zillow has named Austin as the hottest housing market in the country. In the survey, economists and real estate experts predicted that Austin home values would outperform the nation’s average, 2.8%, in 2020. 

However, a hot housing market might have negative impacts for people already living in Austin, according to Austin Board of Realtors president Romeo Manzanilla.

“Most of the growth that’s happening right now is north of Austin, in the Williamson County area.” Manzanilla says, which is why Austin is the “hottest” housing market in 2020. The city of Austin extends into Williamson County, where development is occurring. Meanwhile the core of Austin has stalled as the city battles it out over affordable housing. In 2019, 33,084 homes were sold in Austin according to the Austin Board of Realtors.

“Being a hot market, it just furthers the affordability concerns,” Manzanilla says. Here’s how: home prices go up because the market is hot, but that also drives up property taxes. Higher property taxes force people out of Austin.

Manzanilla also voiced concern about the labor force in Austin, saying the city’s low unemployment works against contractors attempting to hire workers. This makes it harder to build homes and limits the supply for people looking to buy.

The end result is less people living in Austin. “If it gets to a point where it’s just not affordable because salaries are not keeping pace, that could be a concern down the line,” Manzanilla says.

Housing survey results

Experts in the Zillow survey were asked about 25 U.S. cities. Austin performed the best in the survey, with San Francisco performing the worst. In fact, it was one of three Californian cities that received a negative score on the survey, the others being San Jose and Los Angeles.

Texas performed well, in general, with Dallas and San Antonio expected to meet or exceed the nation’s housing market growth. Houston was expected to meet, but not exceed, that 3.9% housing value increase.

Eleven cities in the south performed well. Zero percent of those surveyed said Charlotte would under-perform.

You can find the results of the survey here.

Editor’s Note: Story has been updated with housing numbers through December 2019.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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