On the Market
Starter homes in Austin have all but disappeared, warns new report
It’s becoming increasingly difficult to own property in Austin. Not only is there a lack of housing availability but there’s also a lack of affordable options — and it’s only getting worse. A recent report from Trulia helps to outline exactly how bad the shortage is for the Capital City.
The real estate site looked at the 100 largest U.S. metros to dig deeper into inventory and home buying trends over the past four years. It seems that there is a strong correlation between affordability and availability, two factors going against Austin.
This is being played out most visibly with starter homes (typically the first house an individual or family can afford to purchase) and their scarcity. While 95 cities out of the 100 have shown a decrease in availability, Austin has witnessed one of the largest decreases in the nation.
From January 2012 to March 2016, the amount of starter homes available in Austin decreased by 82.9 percent, the third worst decrease in the entire country. To give some perspective, in 2012, Austin had 1,927 starter homes on the market, but as of March 2016, there were only 329 starter homes available.
Our Texas neighbors in San Antonio and Houston are also among the worst cities for prospective homebuyers. San Antonio had the second highest decrease in starter homes, at 86.2 percent. Houston, at No. 8, experienced a 74 percent decrease. The city that saw the largest decrease in starter homes was Salt Lake City, with an 87.9 percent decrease and an inventory of only 151 starter homes in 2016.
According to Trulia, the supply of starter homes is being affected by the increase of investor-owned property in Austin. This not only drives up prices of starter homes but also trade-up and premium homes, making those properties scarce as well.
It doesn't appear that inventory will get better any time soon. With more than 150 people moving to Austin each day, there’s added pressure for real estate opportunities in the city. So if you’re in the market to buy a home, you’ll want to hire a great agent — and prepare to act quickly — as 329 available starter homes makes for some steep competition.