Experts say housing market booming, prices going up in Austin

AUSTIN, Texas - Experts say expect to pay a lot more than the asking price if you are in the market to buy a house. Nationwide, the housing market has increased by 20%, and the City of Austin is no exception.

"The whole entire country is experiencing a really hot housing market, but by some measures, Austin is really the hottest," said Daryl Fairweather, Chief Economist with Redfin.

According to Redfin's data for 2021 so far, the housing market is booming in Austin with prices up more than 40% from last year.

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"There's lots of people moving in from more expensive parts of the country. The number one origin for people moving to Austin is San Francisco, so when people leave San Francisco, they are used to housing costs of more than a million dollars and then they come to Austin, where home costs closer to $500,000," said Fairweather.

Fairweather says the hot housing market has its pros and cons. "If you are a homeowner, you may be really pleased to see that the value of your home has increased so much in such a short amount of time, but if you're a first-time homebuyer, this can be really disheartening to have to compete with all this money."

Just in April alone, 1,500 homes sold for more than $100,000 above asking price. Last year, only 22 homes sold for that amount. Fairweather says she expects the housing market to continue to skyrocket.

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"I think prices will continue to go up so waiting isn't necessarily a good strategy because you probably end up paying more at a higher mortgage rate if you waited until next year," she said.

These higher price tags are also pushing locals out since many Austinites aren't willing to pay the amount that out of staters are ready to.

"They’re looking to spend over $800,000 on a home according to our Redfin search data, whereas locals are only willing to pay a third of that when it comes to buying a home so this migration is clearly causing some price appreciation just how many more out of towners are coming in," said Fairweather.

Best tip she says she can give if you're buying a home is to be patient. "If you find a home that you really start falling in love with, try to keep some distance from it and stay objective. It can be really hard to keep a cool head and not end up overpaying."

Because Austin homes are expected to continue to go up, experts say other cities like San Antonio may also see an increase in the housing market from people leaving Austin to move there.