With the new year clocking in, we asked for some crystal ball predictions about the one thing all Austinites, rich and poor, think about: housing.

The big picture: Where and how we live remains a central question amid Austin's influx of wealth.

The folks at home listing site Zillow say that if you're set on a bargain, look to the smaller cities outside of Austin.

  • Home buyers want to live in sunny states, but price hikes in markets like Austin make less expensive nearby markets more attractive. The Sun Belt region, including Austin, should expect another big year, according to a Zillow outlook.

What they're saying: "From April to August, Austin held the top spot in quarter-over-quarter home value growth, which is a good indicator of current housing demand," per the Zillow report.

  • That's likely to trickle out to smaller metro areas in desirable sunny states.
  • Plus, flexible work has shifted where people want to live.

Between the lines: The scorching Austin job market will further warm the already hot housing market.

  • "I am doubtful we will see houses selling for hundreds of thousands of dollars over asking like we did in early 2021 when there was an extreme imbalance between available homes and buyers," Austin real estate agent Lilly Rockwell, author of the housing newsletter The Rockwell Report, tells Axios.
  • "The good news for buyers is we are seeing significantly more inventory as sellers grow more comfortable selling during an ongoing pandemic, and I expect that to continue into 2022," she adds. "But our inventory is still not back up to pre-pandemic levels, and Austin will continue to be a very strong sellers' market because we have such robust job creation."
  • Homes could appreciate in value by about 10% in 2022, Rockwell estimates.

Zoom out: Zillow economists' U.S. forecast calls for 11% home value growth in 2022, down from 19.5% in 2021. That would still rank among the strongest years Zillow has tracked.

  • And as rising costs make it harder to save for a down payment, expect demand for larger rentals to increase, especially for single-family homes.
  • "I don't think rents will do anything but increase in 2022, which will continue to price lower income families out of town," Walter Moreau, executive director of the affordable housing nonprofit Foundation Communities, tells Axios.

On the political level, expect continued housing battles at City Hall.

  • Some central Austin neighborhoods, concerned about historical preservation, have resisted proposals to increase density and affordable housing, João Paulo Connolly, director of housing and community development at the Austin Justice Coalition, tells Axios.

The bottom line: Expect more of the same in 2022, as skyrocketing prices and rental rates fundamentally reshape the demographics of Austin neighborhoods.

Source: AXIOS Austin

Posted by Grossman & Jones Group on


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