Austin is struggling to grow as one of the hottest US real estate markets
A trip on Lake Austin with Cord Shiftlet real estate agent is nothing short of breathtaking. He’s used to selling expensive luxury properties like the ones on the waterfront. But since March 2020, demand – and what buyers will be spending – has even shocked him.
“They could probably get $ 25 million for it, if they gave it up,” he said of one property.
“From March to June, we had 19 buyers who were worth up to $ 20 million,” he told correspondent Janet Shamlian. “We’ve never seen this before. I lost count after June. And if I had to guess, I’d say we had 40 buyers which was $ 20 million to $ 50 million.”
And everyone, he says, wants to live on the lake.
Laid-back and long known for its food and music scene, the Texas capital has become one of the fastest growing cities in the country. The downtown skyline is a ballet of cranes and new skyscrapers. Tech giants like Google and Apple extend their footprint and .
According to Zillow, home prices in Austin have risen more than 18% in the past year, creating a shortage of affordable housing.
Since the start of the pandemic, city leaders said, the flow of people moving to Austin has turned into a flood. Many come from California, like startup founder Ben Rehnema, who moved with his partner Craig from a one bedroom to San Francisco.
Shamlian asked, “How is your situation here financially better than it was in San Francisco?”
“Here in Austin, you know, for the same price, about $ 3,000 a month, I can live in a three bedroom house,” Rehnema said. “I have a home gym, I have a home office, I have a backyard.”
Noe Elias has one too, as well as a million-dollar view from his home in the low-income neighborhood where he has lived for decades. With the increase in property taxes, the second-grade teacher doesn’t know how long he can afford to stay here, as popular neighborhoods close to the city center are turned into high-priced housing.
“The city council, the local government, really has to, you know, take initiatives to protect working families – families who earn less than $ 50,000 a year,” Elias said.
He said some state and city government workers, the backbone of Austin, are moving out of town, where prices are cheaper – and the number of homeless people is on the rise.
Real estate agent Shiflet said that even when buyers can afford a home they love, it has become difficult to close the deal. “We had a house on the market last week near Round Rock, a $ 400,000 house. It got 96 offers in two days,” Shiflet said. “Buyers can’t compete with that. I mean, if you’re not all in cash ready to close, you won’t get it.”
Growing pains in the midst of a growth spurt, as the pandemic fuels a city’s rise.