With Austin’s housing growth, construction of single family homes, condos and multifamily complexes in Austin may be too slow to keep up with the city’s population growth. The squeeze may push up prices at some point.
Austin’s population has historically doubled every 20 years, as shown in the chart below. The current pace of newcomers might even be faster than that.
Many of Austin’s newcomers (particularly the younger ones) are renting dwellings rather than buying them. Economic uncertainty and overly cautious lenders make it hard to buy.
As a result, home sales in Austin have declined, as seen in the chart below.
The housing market has responded by supplying or building more multifamily units and fewer single family dwellings, as seen in the chart below. Multifamily Executive magazine says “MPF Research forecasts that it will be the second best apartment performer this year.”
When confidence and demand return full force, there may be a lack of supply on the market. Home inventories are shrinking, according to the Austin Board of REALTORS. Sellers are taking their properties off the market, waiting for a better time to sell.
As apartment rents and construction costs continue to rise, younger and first time buyers increasingly will want to buy. With low, low interest rates now, it may be a great time to buy.
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