The spring selling season is underway, and those looking to purchase a home in Austin should expect to pay a premium — regardless of price point — Zillow says.
A new study from the real estate authority shows that the annual appreciation of Austin-area home values at all price tiers was at least 14 percent in February 2021, with price increases fueled by consistently high demand.
The lowest tier of home values in the Austin-Round Rock metro area grew 14 percent year-over-year, to a typical home price of $287,025, Zillow says. But that jump was eclipsed by home values in the middle tier, up 14.5 percent to $408,106, and home values in the top tier, which grew the most, 14.9 percent to $666,034.
In fact, Austin's top-tier home values have grown faster than low-tier home values every month since March 2020, Zillow says, "a reversal of the overriding trend in most other markets." (That's unsurprising, perhaps, to those following local real estate, as Austin's median home price continues to inch closer to $500,000.)
"Austin stands out as the lone metro among the largest 50 U.S. metros that saw the most expensive tier of homes appreciate faster than the lowest tier over the course of the year, although the low tier is catching up," Zillow says. "Extreme demand fueled massive appreciation in Austin over the course of 2020 and a panel of economists and real estate experts surveyed by Zillow expect Austin to be the hottest metro in 2021."
Zillow's study shows that, in most major metro areas, "homes in the entry-level segment of the market most likely to be sought by first-time and/or lower-income home buyers have also grown the most in value over the past year. And in many areas, the gap in appreciation rates between the most- and least-affordable homes is widening, evidence of the intense competition between buyers on a budget."
In Texas' other top metros, the most affordable tier is growing at a faster clip than the priciest, but not by much.
- In the San Antonio metro, the lowest tier appreciated at a rate of 7.9 percent, to a typical home value of $153,904, compared to 7.3 percent for the top tier.
- In Dallas-Fort Worth, the annual appreciation for the lowest tier was 9.5 percent, up to $194,484, compared to 8.6 percent growth in the top tier.
- In the Houston metro area, the lowest tier saw a 9.3 percent increase, to $166,556, compared to a 7.4 percent increase for the top tier.
These figures indicate that, in markets like Dallas and San Antonio, demand "is largely uniform across segments," Zillow says, "and spreads between appreciation rates are tightening."
Whether you're in the market right now or planning to house hunt in the future, don't expect things to slow down. Looking ahead, Zillow expects the typical home value in each of the metros mentioned to grow by at least 10 percent by next February. In Austin, Zillow predicts a 10.6 percent jump, and in DFW, a 12.6 percent increase.