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“Everything is bigger in Texas.” The often exaggerated saying comes up against money in real estate prices in the capital of the Lone Star State.
That year in Austin, TX, 2,700 homes were sold for $ 100,000 or more above their original list price, according to new data from real estate agency Redfin. It is an extreme case of the nationwide phenomenon that is putting pressure on the housing and rental markets.
City of Goldilocks
Tech and teleworkers living in expensive markets like San Francisco and New York see Austin – which has grown 22% in the last 10 years and is now approaching a million residents – as an ideal blend of renowned music, art, and cuisine and lower cost of living. In May, a record-breaking 50% of U.S. homes were sold above their list price, according to Redfin, but demand in the Texas capital has caused homes to fetch even more whopping premiums:
- Redfin said 74% of Austin homes sold above asking price in April, selling for an average of $ 35,000 above list price.
- In the past 12 months, the number of homes that sold at least $ 100,000 above asking price has increased 10 times in Seattle and 5 times in Oakland. In Austin, that number increased 57-fold.
“As a consumer, it seems scary to find yourself in a real estate market where the house you are looking at is at $ 400,000. Then when you put in an offer, you find that the real price is $ 500,000, ”Redfin’s chief economist told the Wall Street Journal.
Renting is not better: The hyper-competitive conditions of the housing market also affect rents. In the second quarter, the number of occupied US rental apartments rose year-on-year to a record 500,000. Supply is so scarce (occupancy hit a new record high of 96.9% last month) that some apartment hunters are checking into hotels to fill the gap between apartments. The costs also increase; Rent for new rentals in July rose 17% from previous tenants and was its highest ever, according to RealPage.
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