Austin housing market continues to break sales price records—but record-low inventory could spell trouble
The Austin housing market continues to thrive despite the ongoing pandemic, but a continuing inventory shortage could jeopardize its growth.
The median sales price in the city of Austin increased 10%—to $433,493— in November, according to the latest Austin Board of Realtors market report. Meanwhile, the housing inventory fell to less than a month's worth. The Real Estate Center at Texas A&M University estimates a balanced housing market has more than six months' inventory.
"Despite the economic roadblocks and challenges the global pandemic has presented, Austin's housing market activity is stronger than it's been in several years," ABoR President Romeo Manzanilla said in a statement Wednesday.
The rising home prices and falling inventory go hand in hand.
"This near-zero level of housing inventory throughout the region is staggering, and it will put enormous pressure on home prices and the rental market," he said.
The trend is not limited to Austin; the five-county Austin-Round Rock metro also reported a record-breaking median sales price—as well as an all-time low level of inventory.
The median home price in the metro increased nearly 20% to $365,000 while the housing inventory fell to 0.9 months' worth, according to the report.
This is concerning, Manzanilla said.
"Central Texans who could not find a property within Austin's city limits have historically been able to expand their searches outward to find a home," he explained. "But, when the entire region has virtually zero inventory, its leaders must think about how such a broad lack of housing will ultimately impact Austin's sustainability as a destination for business and economic growth."
Demand for housing is amplified by the influx of new residents.
Austin leads U.S. cities in population growth, according to LinkedIn's latest workforce report, which was published earlier this month. And hiring is up year-over-year.
Some big-name tech companies have also attracted national attention for their presence in town.
Tesla is hiring executives for its forthcoming Southeast Travis County Gigafactory, and its CEO Elon Musk is also house-hunting in Austin. Software giant Oracle also recently relocated its headquarters to Riverside Drive from its previous location in Silicon Valley.
"This growth is not sustainable," said Mark Sprague, state director of information capital at Independence Title, in a statement. "The one variable that will hold the market back is the lack of inventory."
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Over a year after they took the stage for the first time in Los Angeles, Austin FC returned to Banc of America Stadium to snatch the No. 1 spot from LAFC in a 2-1 statement win late Wednesday night.
Austin FC, which has flirted with the top spot in the MLS West this season, has now solidly reached the summit just a year after its second-to-last first season finish. The new top dogs are now 7-2-3 overall.
Here's a look at three highlights from the match:
Flashback in LA
For many Austin FC fans and naysayers alike, the match was more than a fight for the MLS West throne: it also served as a symbol of how far the team has come.
The two clubs first met on the Banc of America pitch as Austin FC saw its first game and first loss all at once in a 2-0 battle last April. It was an exciting but shaky start to the club's first season, and the loss seemed to set the tone for the rest of its inaugural year as the club dipped to second to last in the conference.
If Austin's first season was hallmarked by its first match, then its second-year success was foretold by its back-to-back five-goal victories to kick off the season.
Since then, the club has battled its own first-year shadow, claims of "bonus games" and a few unexpected obstacles—both on and off the pitch—but it has almost always come out on top.
That fight to the top was fully realized Wednesday, even as the club played its toughest opponent yet. Even with a man down in the middle due to Daniel Pereira's red card last game, the club kept its cool through even the trickiest moments of the match. Jhojan Valencia, who patched the Pereira hole in midfield, got his first MLS start and first MLS assist as Ruben Gabrielsen scored the first goal of the game.
Gabrielsen came to Austin FC as a potential hero for the team's center back position, but the club's resident Viking has already nabbed two goals in his first season with the team.
"That's center forward material," Austin FC announcer Adrian Healey said as Gabrielsen took control of Valencia's pass, paused to fake out the defense, and calmly tucked the ball into the left corner to complete the first goal of the match.
Even as LAFC dominated possession for much of the match, Austin FC saw another wide-open goal opportunity crumble as midfielder Diego Fagundez's shot hit the corner goalpost in the 23rd minute.
But Fagundez wasn't finished. The midfielder was short on his Verde hair dye but full of surprises as he nimbly sunk a shot over LAFC defense to make it 2-0 with 10 minutes to go.
Fagundez, who has spent more time setting up goals for his teammates (becoming the No. 1 assister in the MLS in the process), finally took the center stage with his second goal this season.
Owen Wolff, head coach Josh Wolff's own son, had a scoring opportunity of his own foiled by the goalpost as he started his first MLS match as one of the youngest starters in the league this season.
But Austin FC wouldn't score again; instead, LAFC powerhouse Carlos Vela made the win a bit trickier in the 86th minute as he got past Austin keeper Brad Stuver to cut the lead in half. The other Wolff quickly subbed in a five-prong defense as the club kept steady for the final 10 painstaking minutes to win the match.
BONUS: Stuver's career-making match
Six saves on the night in LA for Brad Stuver! 🚫 pic.twitter.com/02V6hcUd3Y— Major League Soccer (@MLS) May 19, 2022
After two weeks on the bench due to a knee gash, Austin's star keeper Brad Stuver had the Stuver-iest match of all time (yes, we're making it a word) as he pulled off six saves to help his team to No. 1.
Stuver looked like a pinball machine as he pulled off save after save with his feet, hands and body to keep it nearly 100% clean on the back end.
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Lately, the crypto market is looking shaky.
The price of bitcoin fell by more than half from its high, the digital currency luna crashed to $0 and a type of so-called stablecoin TerraUSD has been described as dead.
Reporting from the LA Times notes that experts seeing a correlation between traditional markets and the cryptocurrency market is high right now, with plunges in one being followed by a plunge in the other. On Wednesday, stocks had their worst day in more than two years with the Dow Jones Industrial Average falling 1,164 points.
Crypto’s volatility has long been questioned, especially after SXSW this year was filled with Web3 enthusiasts and displays.
With 8% of Texans owning Bitcoin and many others involved in the local crypto and Web3 scene, what are they feeling amid the crash?
In a written comment to Austonia, ATX DAO said a positive with the downturn is that “most of the speculative moneygrab type projects get washed out of the market, and the quality projects that deliver real value remain and gather more attention.”
The group went on to say it could work to their advantage as they carry out their latest project: a mural at Native Hostel that will have an NFT version. They’ll use sales toward donations to HOPE Outdoor Gallery, a local nonprofit that supports artists and creatives.
Meanwhile, Yagub Rahimov, a founder of an Austin-based Web3 company explains that they aren’t really impacted by the crash.
Since the company known as Tested Web functions as a Web3 online reputation marketplace, it is utilizing blockchain technology without tokenizing.
“We are a share to earn marketplace. That means that any activity that users have on tested web.com, we will be rewarding,” Rahimov said. “Those rewards are coming in the form of rewards points. And every quarter they can opt in to receive either a gift card or a check. We are not issuing any cryptocurrency. That's one of the important elements that I believe we got it right that way.”
With recent developments at Tested Web, Rahimov says he “couldn’t be happier.” After struggling to find tech talent in early spring, he’s had a hiring spree in the last 10 days and received a $1 million grant and partnership with Silent Notary, a blockchain-powered validation provider.
But his recent business success aside, Rahimov is noticing what’s happening in the markets and predicts that the correlation between the crypto market and traditional one will be broken.
“The way Bitcoin was introduced back in 2009, it was as a reply or response to the 2008 market crash,” Rahimov said. “And it really feels like we are in 2007, 2008, actually, early, early days of the market crash. And if it becomes that way, very likely that the winner is going to be those of decentralized parties.”
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