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Austin homebuyers have been through the wringer in the past year—tales of offers well over asking price, sales in under an hour, and months-long supply chain shortages have become commonplace in the city's cutthroat housing market. So it's perhaps no surprise that many homebuyers are looking for greener pastures as they stake out large empty lots along the city's outskirts.
After casually searching for a home for years, Austin influencer and blogger Jane Ko experienced the pandemic housing surge firsthand when she found an empty lot near the airport in the summer of 2020. Stretched thin by high demand and limited supply, Austin's median home prices had already reached a then-record of $435,000 in August of that year, while new inventory grew by just 0.1% in that month.
Due to seemingly ever-increasing demand, Austin's homebuilding market has been busy—if not strained. New listings were up 6% in November 2021, while median home prices had cooled ever-so-slightly to $470,000. The area was ranked the fifth-busiest metro in the country for single-family homebuilding permits in August 2021, according to a National Association of Homebuilders report.
Austin influencer Jane Ko build a semi-custom home on an empty lot near Austin-Bergstrom International Airport. (Jane Ko/A Taste of Koko)
"I think for those of us that have been here, we've seen prices rise in the last five years and I kind of figured if I don't buy now, then I probably won't be able to," Ko said. "I kind of stumbled upon it and I think for a lot of people that's been really the only way to find real estate since the market is so hot."
Austin's inventory has remained somewhat low, especially in the center of town, leading some to believe that homebuyers are being "priced out" by the city's limited options. Area suburbs are reflecting that—the Kyle-Buda-San Marcos region saw 2,900 new home starts from September 2020-21, more than any other Austin submarket.
But with new developments working to keep pace with demand, 2021 Austin Board of Realtors President Susan Horton told Austonia the trend just reflects customer desires.
"I don't think that folks are being pushed by any means," Horton said. "Folks that want to buy out in the rural areas are buying for personal reasons and they're buying because they want the land and privacy. Folks really, truly want to be out. If you want a big lot, it's there."
Like many homebuyers during the pandemic, Ko was happy to scrap Austin's downtown for more space. Because she works from home, she said she and many of her friends are looking for bigger homes and bigger lots in hot areas like Dripping Springs.
Ko had the option of moving into already-built homes within the neighborhood but opted for a custom-built home instead—something that Horton said is another draw for prospective homebuyers.
Austin influencer Jane Ko remodeled her kitchen after building her semi-custom home. (Jane Ko/A Taste of Koko)
Ko's kitchen remodel took months due to supply chain delays/ (Jane Ko/A Taste of Koko)
"The desire to be away from the person next door is really most of the time the deciding factor," Horton said. "And then there are those that want to have a house simply because they want to design it themselves, and so those are the aspects that make buying that raw land and building a house really important."
But building a custom home has its drawbacks. Horton said construction loans, land surveying, zoning restrictions and road access are all hoops that can be jumped through with an experienced realtor.
But even through the tedious and stalled homebuilding process, Ko said it's been worth it to create a home made just for her.
"This is a place that I'm hopefully going to stay in for a very long time," Ko said. "And I think because I do a lot of entertaining at home and shoot photos at home, it's really important that my space looks the way I want it to."
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In earlier phases of the pandemic, people took it as the perfect moment to uproot their lives to the newest boomtown. Many, particularly Californians, found a fit with Austin, enjoying the Texas weather and lower cost of living. But for some, it may only be a pitstop.
Melaku Mihret, who works remotely in Austin for a Meta office in the Bay Area, thinks some of the Californians who have moved to Texas in the pandemic may just move here temporarily, save money and then head back. Others have also speculated a possible reverse migration, but it may be too early to tell.
According to the Kinder Institute at Rice University, Texan migration to California has remained steady for years. And when it comes to Californians leaving, the institute says it's less about a pull into Texas and more of a push out of California driven by home prices.
But they're not all staying in Austin. U-Haul data shows departures from Austin were up 18% even as one-way arrivals were up 22% in 2021.
Melaku Mihret, a remote worker a Meta office in the Bay Area, is now living in Austin. (Andrea Guzman)
For Mihret, the biggest driver behind his move was the squeeze of costs in Northern California. If the cost of living wasn’t an issue, Mihret said he’d live in the Bay Area. So if Austin continues to become less and less affordable, would Californians go back?
For Mihret, not many places come close to what California offers. He points to the nature, such as the mountains and lakes, in California and the massive tech hub it is. Austin is “not even nearly close to California,” Mihret said, after acknowledging Austin's growth as an emerging tech hub.
Meanwhile others like Ian Davies, who grew up in Austin and left in 2011 when he was in high school, much prefer living in Austin.
His family had moved to Philadelphia, years passed and he eventually landed a job in financial operations at NBC Universal in Los Angeles, California. When the option of remote work during the pandemic came around, he longed to return home.
“I couldn’t wait to move back to Austin,” Davies said. “Not that I didn’t enjoy my time in LA. But LA is just a whole other beast than Austin.”
Ian Davies does remote work for NBC Universal in Downtown Austin in early January. (Andrea Guzman)
But a downside he says is it's become more expensive in the past year and half since he returned. The Austin-Round Rock-Georgetown metro area had the 12th highest change in a recent study on cost of living increases across the country. And among the nation’s top 10 tech hubs, Austin saw the largest year-over-year increase in average rent this past September, with an average of $1,647.
It's a cost of a growing city. Davies sees a positive in all the growth, as he enjoys living in a city with a diverse population, like when he was in LA.
“There’s a group of Austinites who are very against people moving here, and I’m definitely not part of that crowd. I want to share this city with other people. I think it’s awesome.”
He says he wouldn’t want to be anywhere else.
“I hope that Austin can keep its soul and keep its weirdness. Like blues and rock and live music,” Davies said. “I haven’t seen much of that change. I hope people that move here can adapt the spirit of the past and carry that.”
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Austin has a new celebrity in its midst! Best known for his role as Cyclops in the “X-Men” movies, actor James Marsden has relocated to West Austin.
Records show that Marsden purchased an approximately $1.8 million home in the Commons Ford area in May 2021, the San Antonio Express News first reported. Months earlier in December 2020, he told Kelly Ripa and Ryan Seacrest on “Live with Kelly and Ryan” that he was renting a home in the Austin area.
Growing up in Oklahoma, 48-year-old Marsden said he loves the Austin area.
“I love it. I’ve been coming here for 20 years,” Marsden said. “It’s still got that small-town feel to it but it’s definitely booming at the moment.”
Marsden is well-known for his continued role of Cylops in X-Men. (X-Men)
The five-bedroom, four-and-a-half bathroom, 5,160 square foot home was built in 2007. With several houses in Los Angeles over the years, Marsden’s new home seems like a modest choice but comes with seven-inch ebony hardwood floors, a living room fireplace, and mature trees on a full acre of land.
The home is fitting for a celebrity client, boasting a guest casita with a full kitchen, murphy bed and an outdoor shower on the Ipe wood deck.
It is unclear how much Marsden paid for this new abode, though records show that Marsden took out a loan of $1.84 million for the principal amount.
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