Austin Housing Market Strong But Slowing As Income And Home Prices Diverge, Expert Says
Austin shouldn’t expect the housing market gains it has seen in the past couple of years.
That was the prevailing sentiment delivered by Eldon Rude, principal with 360 Real Estate Analytics, at the Homebuilders Association of Austin’s annual housing forecast today. Developers joined elected officials and local government staff to eat breakfast and hear about what to expect in 2019.
First: Rude doesn’t expect the number of homes built in Central Texas to exceed the number in 2018 when 16,500 new houses were permitted.
“We’ll probably be flat at best for 2019,” he said. “That said, that’s a lot of houses.”
Rude blamed, in part, the city’s growing gap between income and home prices. According to census numbers, the median-family income in the Austin metro area is $91,862, while home prices for the area are 3.5 times higher. That’s a higher disparity than in years before, Rude said.
He cautioned that this widening could upset Austin’s ability to endure a future recession.
“Those cities that have the biggest disparity between income and home prices during recessionary periods are most likely to lose value in terms of home prices,” Rude said.
Rude said the Austin housing market had a strong start in 2018, but slowed at the end of the year.
“People are not as confident as they were,” he said. “They’re not feeling confident about their financial situations.”
But given all that, Rude said, the demand for housing in Austin remains strong as more employers move here. In December, Apple announced it would build an office on the edge of the city, making Austin the second-largest home to Apple employees.
“The economic data suggests continued strong demand for housing in Austin. We’re going to have strong job growth,” Rude said. “We’re going to have a lot of people moving here looking for houses.”