Small Spaces

Austin housing market offers worst bang for the buck in Texas, says report

No surprise here — $350,000 won't get you much space in Austin.

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When it comes to buying a home that supplies the most space for the price, Austin has little to offer, a new study indicates.

For the study, real estate platform RealtyHop looked at how much square footage a homebuyer could get for a median price of $350,000 in the country’s 100 largest cities. The study found that in Austin, $350,000 gets a buyer only 1,056 square feet.

That makes Austin worst in Texas on the bang-for-your-buck scale, with buyers paying $332.10 per square foot.

Meanwhile, RealtyHop cites San Antonio and Houston as two of the standouts in the U.S. for affordable housing. In nearby San Antonio, a buyer can pick up a 2,116-square-foot home for $350,000, or $165.38 per square foot. In Houston, a buyer can get 1,804 square feet for the same price, or $194.06 per square foot.

Nationally, San Francisco tops the list of least affordable cities. There, $350,000 will get you a measly 349 square feet of space ($1,003.18 per square foot). At the other end of the spectrum, that sum will get you the most space (4,769 square feet, close to the size of a small mansion) in Detroit. That adds up to just $73.39 per square foot.

“For many, the tradeoff between space and cost is a deciding factor on where they choose to settle down. Should you buy a tiny studio in Manhattan or a large townhouse in Atlanta?” RealtyHop observes. “The reality is that living in certain places often means downsizing your expectations.”

Here’s what $350,000 will buy you in the largest cities in Texas, according to RealtyHop:

Austin, 1,056 square feet, $332.10 per square foot.
Dallas, 1,574 square feet, $222.36 per square foot.
Plano, 1,741 square feet, $201.03 per square foot.
Irving, 1,769 square feet, $197.81 per square foot.
Houston, 1,804 square feet, $194.06 per square foot.
Garland, 2,013 square feet, $173.91 per square foot. (The median home size in Texas is around 2,000 square feet.)
Fort Worth, 2,204 square feet, $172.92 per square foot.
Arlington, 2,056 square feet, $170.26 per square foot.
Corpus Christi, 2,092 square feet, $167.27 per square foot.
San Antonio, 2,116 square feet, $165.38 per square foot.
El Paso, 2,742 square feet, $127.65 per square foot.
Laredo, 2,842 square feet, $123.13 per square foot.
Lubbock, 3,569 square feet, $98.07 per square foot.

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Homebuyers can afford to be picky as Austin housing inventory rises

Photo by Avinash Kumar on Unsplash

Housing economist Clare Losey said the most significant factor affecting home sales in Austin is high mortgage rates.

The latest real estate report from Unlock MLS and the Austin Board of Realtors (ABoR) has revealed housing inventory is still on a steady rise in the Austin-Round Rock-San Marcos MSA, creating more choices for potential homebuyers as they navigate a high interest rate market.

Residential home sales dipped by a mere 1.5 percent year-over-year from October 2023, amounting to 2,248 closed sales in the Austin-Round Rock-San Marcos MSA. Median prices have also dropped to $430,000, or 3.2 percent less than this time last year. More than 3,300 new home listings were added on the market — a 7.4 percent increase from 2023 — bringing the total number of active home listings to 11,599.

According to Unlock MLS and ABoR housing economist Clare Losey, Ph.D., October's mortgage rates stood at 6.4 percent and are showing no signs of a significant drop in the near future. Even heading into 2025, Losey says potential homebuyers who are biding their time in the hopes of seeing rates plummet "may be in for a long wait."

"In the meantime, sellers must recognize that bringing buyers to the table requires a more aggressive pricing approach," Losey said. "Even in a more balanced market, buyers with limited purchasing power are struggling to meet current price expectations."

As for the overall health of the Central Texas housing market, 2024 Unlock MLS and ABoR president Kent Redding labeled recent news reports that called Austin "ground zero" for a downturn as an "extreme over-exaggeration."

"Austin led the state and nation in record-breaking home price growth and sales activity during the pandemic," Redding said. "For three years, near-zero housing inventory, numerous offers above list price and a rapid-paced market raised home prices and left little negotiating power for buyers. During this record-setting growth, ABoR and Unlock MLS consistently emphasized the unsustainability of the rapid growth, and now, our market is working to balance those extremes."

Central Texas housing trends in October 2024

In Travis County, 979 homes were sold last month — a slight 2.5 percent increase from last year. Median prices remained flat year-over-year at $510,000. Active home listings continued growing to 5,702 homes, which is 9.4 percent more year-over-year.

In Williamson County, 807 homes were sold in October, with median prices steadily dropping to $420,000. There were 1,028 new home listings on the market, showing a 4.5 percent increase from October 2023, bringing the total number of active home listings to 3,369.

Residential home sales dropped by nearly eight percent in Hays County in October, totaling 315 sales. Median prices also fell 5.5 percent year-over-year to $359,000. Active listings rose 6.6 percent year-over-year to 1,740 homes with the addition of 534 new listings on the market.

Meanwhile, 114 homes were sold in Bastrop County last month, which is 4.4 percent more than this time last year. Median prices dropped by a single percentage point year-over-year to $355,000. There were 654 active listings on the market in October, and 152 new home listings, representing a 1.3 percent slip in new inventory when compared to last year.

Only 33 homes were sold in Caldwell County in October to reflect a near 14 percent decline year-over-year from October 2023. Median prices fell to $262,990, which was a 13.5 percent decrease from last year. There were 136 active homes on the market last month, and 40 new homes added on the market.

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