It’s no surprise that home prices have been going up in the Austin area, especially during the past 5 years. It’s also no surprise that the trend is more pronounced the closer you get to Central Austin. Here is a look at sales and median sale prices over the past 10 years:
And for comparison, here is the same view of the Urban Core — the area in Austin bounded by US 183 north and east, Hwy 71/Ben White Blvd on the south, and Loop 360 to the west:
Demand patterns for all five of those views are very similar, with unit sales moving very much in parallel. (The dip in 2017 sales is almost entirely because this data only includes 9 months’ activity.) The noticeable difference from chart to chart is the median sale price.
Although we tend to use median prices for market comparisons, this look at average prices is especially interesting:
Notice that there is a significant difference between average and median prices in each of the charted market areas. That indicates that the half of sales above the median range MUCH higher, and the half below the median are relatively near the median.
It’s also worth noting that all of the charts above use MLS data that includes sales of houses, condominiums, and townhouses. Instead, consider what has happened to the prices of single family homes in Austin’s urban core:
Compared to prices in the San Francisco Bay area or New York City, $600,000 doesn’t seem especially shocking, but depending on financing, a purchase at that level will require twice the median income for the entire metro area, or more.
Land development policies in Austin make it very difficult to build anything but single family homes on large lots. There really are only two ways to build more affordable homes — higher density and smaller floorspace per unit. Austin is working to rewrite its land use code (a 5-year old project named CodeNEXT). Without real progress in that effort adding “missing middle” housing types is largely out of reach, and “drive ’til you qualify” will remain especially relevant for prospective home buyers in the Austin area.