AUSTIN – (By Dale King, Realty News Report) – Most sectors of the Texas housing market have spent at least two years enduring the vicissitudes of COVID-19, at the expense of soaring prices for single-family home buyers , supply shortages that delayed construction and building material inventories clogged with deliveries before inflation and soaring mortgage rates cooled this overheated situation.
But one segment of the residential buying and selling arena — high-end homes priced at $1 million or more — has generally avoided the hardships of a wild Lone Star housing ride.
A recently released report from Texas A&M University’s Texas Real Estate Research Center (TRERC) indicates that sales of opulent mansions have increased significantly from pre-pandemic levels in the state’s four largest metros.
The state capital, Austin, seems to be leading the luxury housing boom. Not only has the city grown in size over the past few years, but it’s approaching the number of high-end homes sold in Houston, Dallas, and Fort Worth.
A few Austin realtors say the slew of seven-figure home sales is likely to continue. “I just don’t see Austin losing his cool factor anytime soon,” said Leslie Gossetgeneral manager at The agencya global marketing and sales organization in the capital.
“Over the past few years, Austin has become one of the most desirable real estate markets in the country,” added Noa Levy, official broker of The Agency in Austin.
“With its vibrant entertainment offerings, growing culinary scene and coveted lifestyle, Austin will likely continue to thrive,” noted Levy, a top agent with deep expertise in the Austin market.
“The number of luxury homes sold in Austin in the first five months of 2022 was nearly double the number sold there for all of 2018,” Texas A&M researchers said. “Compare that with Houston, Dallas/Fort Worth and San Antonio, where the number of sales over the same period was roughly equivalent to the total sold in those cities four years ago.”
The university’s report says that in 2018, Austin’s luxury sales were half that of Houston and D/FW. “In 2021, however, Austin was only slightly behind Houston.”
The two cities have been neck and neck this year in terms of high-end home sales, and Joshua Robersonsenior data analyst at Texas A&M’s research center, says Austin is on course to surpass Houston.
“What makes this all the more remarkable is that Austin’s population is only about one-sixth the population of Houston and one-seventh that of D/FW,” Roberson said. Dallas/Fort Worth has led the state in luxury home sales for five consecutive years.
Gossett put the numbers in play. “The median list price this week in 78746, one of Austin’s richest ZIP codes, is $2,775,000. That’s significantly higher than the median list price in Dallas this week in one of Dallas’ affluent ZIP codes, 75222, and Houston’s 77024, with a median of $2,217,500.
Immigration from the West Coast raises Austin prices
Levy took a broader view. “With inventory still low, population growth continuing, and businesses continuing to move to Austin, it’s no surprise that luxury homes over $1 million are in high demand.
“In 2020-2022,” she said, “the real estate market has seen an influx of clientele migrating from other cities in search of a better and more expensive residential product, more land and bigger houses. In my experience, this was directly related to the pandemic, where clients were looking to swap their expensive apartments in New York and San Francisco for sprawling homes in Texas.
This echoes the findings of a TAMU researcher. “Intrastate migration, particularly among higher-income households, has propelled luxury home markets,” Roberson said. “And booming DFW and Austin have provided steady growth to the state’s overall luxury market.”
Levy also noted companies “bringing their businesses to Texas, also taking advantage of tax incentives and lower property taxes.”
Tesla and Oracle recently moved their headquarters to Austin from the West Coast, and tech companies including Google and Facebook have opened major offices in downtown Austin.
Gossett added his own boost for the city. “Austin consistently ranks at the top of list after list of the best places to live. Between tech companies moving their headquarters here, a top university, our bustling music scene, and an active outdoor community, Austin attracts people of different demographics. We are – and continue to be – “discovered”.
The entire Austin real estate market has been extremely hot, with home prices rising about 30% in the past year, the highest appreciation in the nation. There have been several reports that hundreds of Austin homes have sold for more than $100,000 above the original listing price. In June, the median sale price reached $537,475, according to the Austin Board of Realtors.
TAMU’s Robertson did not provide a definitive prognosis for the remainder of 2022. “While year-to-date sales [in Austin] are poised to top pre-pandemic sales, it’s too early to tell if there’s enough momentum to top 2021 sales.”
August 3, 2022 Realty News Report Copyright 2022
Photo credit: Ralph Bivins, Realty News Report Copyright 2022
File: Austin reaches the next level in luxury home sales
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File: The Agency. Austin is reaching the top tier of luxury home sales. Texas A&M.