AUSTIN (KXAN) — Demand for buying a home is at an all-time high in Austin, but you better be ready to spend some money.
Austin ranks among the best cities to live in, but living here can be a challenge with rising home prices.
“Our median sales price is up 19% year-over-year at $365,000 which is just an astronomical number and our inventory is crazy low,” said Zac Barger, an Austin realtor.
Barger says now is the time to buy with mortgage rates low, but be ready to navigate an extremely competitive market.
“If it is the first weekend on a house, my clients and I are pressed to come in $10,000-$20,000 above list price to give ourselves a shot,” Barger said.
With demand up and few houses to choose from, prices are soaring. It’s a big problem for home buyers, says Austin City Council member Greg Casar.
“The current path has blocked younger folks out from their ability to buy a house in Austin,” Casar said. “We have to learn from the mistakes of the bay area in San Francisco. We can’t become the next San Francisco.”
Companies like Google and Tesla moving operations to Austin will also play into what happens to the market. As more companies move here, that means more people looking for homes, and the city is also attractive to outside investors.
“There is investment coming into the city, and if we don’t have enough housing supply and outside investors are buying some part of it, that leaves even less for home buyers,” Casar said.
Barger says an increase in interest rates could help slow the increasing prices, but more inventory is the biggest need.
“We just don’t have enough houses,” Barger said.
Casar says it’s a topic that needs a closer look.
“We need to change our land development rules so there can be more houses inside the city so that when growth pours in we aren’t pushing so many people out,” Casar said.
Last year the average time a home was on the market was 62 days, but this year that number is down to 33 days.
Another contributing factor to fewer homes being on the market could be fears over COVID-19. With people social distancing and not wanting to come into contact with others, potential sellers could be waiting until things settle down.