The worst might be behind us, but experts say that inflation isn’t going down anytime soon. Everything is more expensive these days, homes, gas, and groceries.
The Austin real estate market saw the cons of inflation more than other cities. What does real estate in Austin look like now that the intensity of inflation is slowly going away? Keep reading to find out.
1. You Don’t Need a Real Estate Agent
Surprisingly enough, you don’t need a real estate agent to buy or sell a home in Austin, TX. You can list your home through a realtor, but you don’t have to.
For sale by owner (FSBO) is a less common option, but some homeowners choose to do this to avoid paying a commission. In addition to saving on a commission, you have complete control over the process.
You can also choose to sell your home to a cash buyer, which offers a lot of benefits for homeowners. Austin sellers can take advantage of these perks with this option:
- No appraisal
- Fast closing
- Save on repairs
- Skip showings and marketing
- Skip the inspection
Most importantly, taking a cash offer eliminates the risk of the sale falling through.
2. Austin Homes Are Overpriced
To be fair, a lot of homes across the United States are currently overpriced because of the ongoing seller’s market.
Austin was one of the top three cities to experience the most changes in the past two years when it comes to climbing prices and sinking inventory, in addition to Tampa and Las Vegas.
Home prices have climbed 44% from the first quarter of 2020 to the first quarter of 2022.
Austin is no longer ranked the #1 hottest housing market in the country and now stands at the fourth hottest market. This is largely due to the high housing prices and high job growth.
However, Austin is experiencing a rapid increase in the economy, which is driving more people to the city. Plus, Austin real estate is appreciating rather than depreciating.
Overpriced homes aren’t ideal for buyers or sellers. Buyers won’t be able to find a lot of options within their budget, and sellers will be forced to keep their homes on the market for longer.
Overpriced homes don’t sell fast, even when the market is hot. If you have to sell your home within a certain amount of time, it’s best to consider cash offers that don’t require a complex closing process or putting your home on the market.
3. Real Estate Is Driven by Quality of Life
You might be wondering why people flock to Austin if home prices are so high. One of the main reasons is that homeowners and renters find the costs worth it because of the excellent quality of life that the city provides.
Austin is known for live music, which is why it’s called the Live Music Capital of the World.
Current home prices are high, but the overall cost of living is reasonable, which also drives a better quality of life. Grocery costs are below the average, and Texans don’t have to pay income taxes.
Within Austin, these are some of the areas with the lowest cost of living:
- Redwood, Texas
- Uhland, Texas
- Lago Vista, Texas
- Round Rock, Texas
Food and entertainment costs in Austin are reasonable, which helps the overall cost of living even when home prices are high.
4. A Massive Student Population Rents
The real estate market in Austin is hot for renting because of the high home prices and the massive student population.
Students that attend the University of Texas will rent properties for a premium if they are easy to commute to and from the school. The school alone has over 40,000 students, a lot of them looking to rent.
The Austin Community College is also a huge player that represents renters in the real estate market.
A lot of college students choose to stay in Austin after graduating because they enjoy the city and can find various high-paying jobs. This explains why the housing market continues to grow quickly.
Young adults that choose to settle down in Austin contribute to the high housing prices and future demands for housing in the real estate market.
5. Active Upscale Market
Austin, Texas has attracted high-tech employers and has been nicknamed Silicon Prairie and Silicon Hills. This has resulted in a trending active, upscale market.
Some of the major local employers in Austin that have contributed to this growth are:
- IBM
- Apple
- Cisco Systems
- Amazon
In addition to these major players, there are over 3,300 tech companies in the area that employ more than 100,000 tech workers. These workers are all competing for Austin homes and increasing market prices.
The market has seen exponential growth after it was expected to dip by encouraging biotech and medical employers to relocate to the city.
6. No State Income Tax
Another reason people are ready and willing to move to Austin, Texas is that the state has no income tax. As a result, the property taxes might be high, but many residents find that this perk is worth it.
For investors, there is an even lower local and state tax burden. Investors often choose Austin to buy homes and rent them out for this reason.
High earners flock to Austin because they can save much more of their money with no state income tax.
States with no income tax seek revenue from higher sales taxes, property taxes, and gasoline taxes, but keeping your income offsets this.
Real Estate in Austin, TX: The More You Know
Knowing about real estate in Austin, TX can prepare you for the future of your Austin home. Now is a great time to sell a house because it is a seller’s market. However, the process is still as complicated as ever.
If you’d rather avoid the complications of putting your home on the market and waiting for the highest offer, we can help.
Get your cash offer today to sell your house fast.