AUSTIN – (By Dale King, Realty News Report) – Most sectors of the Texas housing market have spent at least a couple of years enduring the vicissitudes of COVID-19, the detriment of soaring prices on single-family dwelling buyers, supply gaps that delayed construction and delivery-clogged stocks of building materials before inflation and spiraling mortgage rates cooled this overheated situation.
But one segment of the residential buying and selling arena – high-end homes priced at $1 million or more – has generally sidestepped the difficulties of a wild Lone Star housing ride.
A newly released report from the Texas Real Estate Research Center (TRERC) at Texas A&M University says sales of opulent manses have risen significantly from pre-pandemic levels in the state’s four largest metros
The state capital, Austin, seems to be leading the boom in the deluxe dwelling field. Not only has the city been gaining momentum over the past few years, it is closing in on the number of high-class dwellings being sold in Houston, Dallas and Fort Worth.
A couple of real estate folks in Austin say the bevy of seven-figure home sales is likely to continue. “I simply don’t see Austin losing its cool factor anytime soon,” said Leslie Gossett, managing director at The Agency, a global marketing and sales organization in the capital city.
“Over the past several years, Austin has become one of the most sought-after real estate markets in the country,” added Noa Levy, broker of record for The Agency in Austin.
“With its vibrant entertainment offerings, growing culinary scene and highly coveted lifestyle, Austin will likely continue to boom,” noted Levy, a top-producing agent with in-depth Austin market expertise.
“The numberof luxury homes sold in Austin in the first five months of 2022 was almost twice the number sold there for all of 2018,” researchers at Texas A&M said. “Compare that with Houston, Dallas/Fort Worth and San Antonio, where the number sold during the same period was about on par with the total sold in those cities four years ago.”
The university’s report says that in 2018, Austin’s luxe sales were half of those in Houston and D/FW. “By 2021, though, Austin was only slightly behind Houston.”
The two cities have been neck-and-neck this year in terms of upscale home sales, and Joshua Roberson, lead data analyst with the research center at Texas A&M, says Austin is poised to surpass Houston.
“What makes this all the more remarkable is that Austin’s population is only about one-sixth the population of Houston and one-seventh that of D/FW,” Roberson said. Dallas/Fort Worth has led the state in luxury home sales for five years in a row.
Gossett put the numbers on the line. “The median list price this week in 78746, one of Austin’s wealthiest zip codes, is $2,775,000. This is significantly higher than the median list price in Dallas this week in one of Dallas’ wealthiest zip codes, 75222, and Houston’s 77024, with a median of $2,217,500.”
In-Migration from West Coast Lifts Austin Prices
Levy took a more expansive view. “With inventory still low, continued population growth and companies continuing to relocate to Austin, it is not surprising that luxury homes in excess of $1 million are in high demand.
“In 2020-2022,” she said, “the real estate market saw an influx of clientele migrating from other cities seeking a more quality, higher-priced residential product, more land and larger homes. In my experience, this was directly tied to the pandemic, where clients sought to swap their pricey New York and San Francisco apartments for sprawling homes in Texas.”
That echoed the findings of one TAMU researcher. “In-state migration, particularly among higher-income households, has propelled luxury home markets,” Roberson said. “And booming DFW and Austin have provided steady growth for the state’s overall luxury market.”
Levy also took note of businesses “bringing their companies to Texas, taking advantage of tax incentives and lower property taxes as well.”
Tesla and Oracle recently relocated their headquarters to Austin from the West Coast and tech companies, including Google and Facebook, opened sizable offices in downtown Austin.
Gossett added her own thumbs-up for the city. “Austin consistently ranks high on list after list of best places to live. Between tech companies relocating their headquarters here, a top-ranking university, our bustling music scene and an active outdoor community, Austin attracts people of varying demographics. We are – and continue to be – ‘discovered.’”
The entire Austin realty market has been extremely hot with home prices rising about 30 percent last year, the strongest appreciation in the nation. There were multiple reports that hundreds of Austin homes had sold for more than $100,000 over the initial listing price. In June, the median sales price hit $537,475, according to the Austin Board of Realtors.
TAMU’s Robertson didn’t posit a definitive prognostication for the rest of 2022. “While year-to-date sales [in Austin] are on pace to surpass pre-pandemic sales, it’s too early to tell if there is enough momentum to exceed 2021 sales.”
Aug. 3, 2022 Realty News Report Copyright 2022
Photo credit: Ralph Bivins, Realty News Report Copyright 2022
File: Austin Reaches Top Tier of Luxe Home Sales
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File: The Agency. Austin Reaches Top Tier of Luxe Home Sales. Texas A&M.