Real Estate Report
Can Austin salaries keep up with skyrocketing home prices?
KVUE — James and Cathy Sikes hope to spend their retirement years with the dog rescue group they run, but their Round Rock home is getting to be too much work and the taxes too high.
"Since we're going to be on a fixed income, I figure we have to be real careful about what our taxes are," James said. So they decided to sell.
"Ours sold within the first day of being on the market," he said. In 12 hours, the Sikes got more than they asked for on their 3,000-square-foot home. Finding a smaller place they could retire in is an entirely different story.
"We wanted everything, but we wanted it for half the price," Cathy said. "It wasn't out there; the prices were exorbitant."
"Inside of Austin they were unbelievably expensive, so we started to look outside of Austin," James said.
You don't have to drive far to get a feel for Austin's hot housing market. But you may have to drive far to find something you can afford.
"We tell our people you drive until you qualify," said Jonathan Stilley, who works with Private Label Realty and is an Austin Board of Realtors board member. He has sold homes in Austin for the last 13 years and is helping the Sikes.
"We lost three houses. Two of them we bid over asking price and still were not the highest bidder. We have people come to us and say very reasonable things, 'I would like a 1,400-square-foot home for $250,000 dollars or less in Austin,' and the answer is, 'Good luck.'"
The Austin Board of Realtors shared sales by ZIP code with KVUE. The dark green signals areas where the highest number of homes sold. Over the past five years there has been a huge migration of people fleeing Austin for the suburbs.
"We all look for that needle in a haystack in Austin and the problem is the haystack has moved; it's not in Austin anymore," Stilley said.
Four of the hottest housing markets in the country are right here in Texas. Austin is among them with nearly 160 people moving here every day. The majority of people moving from out of state are choosing Travis, Williamson and Hays counties. They're coming from like California, Florida, Illinois, even Massachusetts.
Some argue that the influx is driving up prices faster, especially in these ZIP codes:
- 78751 — Prices in Hyde Park have jumped 43 percent in two years.
- 78746 — West Lake Hills is up 41 percent.
- 78726 — The 620 area between Anderson Mill and the Oasis is up 25 percent.
- 79669 — The Bee Caves area into Spicewood has increased by 22 percent.
- 78704 — The heart of Austin has jumped 18 percent.
"There simply is not the supply," Stilley said. "And because the housing has gotten so expensive, the people that would normally sell in five or six years look at it and say, 'If I sell my house, what am I going to buy?' They tend to stay and remodel their houses which just exacerbates the problem."
Salaries have not kept pace with property values. Since 1990, median salaries in Austin have increased 91 percent. However, median home prices over that same time are up 229 percent.
"Just look at the last five years. The median income has gone up about 2 percent over that time; the median home price in the city of Austin over that five years is up 47 percent," Stilley said.
Read the full story and watch the video on KVUE.com.