Surprise, surprise: Austin sees record-breaking real estate year in 2021

After months of record-setting periods for Austin real estate, the Austin Board of Realtors announced Tuesday that the metro's housing market accounted for over $23 billion of economic activity in 2021, making it the biggest year yet for both home sales and median home prices in the metro.

The Austin-Round Rock MSA saw 41,316 homes sold in 2021, 2.5% more than a record-setting 2020. Median home prices skyrocketed as well, rising 30.8% from 2020 to $450,000. The housing market also saw unprecedented impact on Austin's economy, with sales dollar volume jumping to over $23.38 billion, and more homes hit the market in 2021 than any previous year, increasing by 5.9% to 46,449 total homes listed.

(Austin Board of Realtors)

As many recent Austin homebuyers have experienced firsthand, Austin Board of Realtors 2022 President Cord Shiflet said 2021 was the most "exciting, complicated, fast-paced and record-setting housing market" in Austin's history.

Shiflet dubbed the market as "complicated" for a reason—Austin became a case study on supply and demand in 2021, with demand far outpacing the number of active listings, which dropped by 48.2% to 2,348 homes in 2021.

The metro ended the year with 0.6 months of inventory, a far cry from a "healthy" six-month supply, and houses were snatched at breakneck speeds, spending 25 fewer days on the market when compared to 2020. The average home was on the market for 20 days.

But low inventory is more due to high demand than a stagnant homebuilding market, Mark Sprague, Independence Title's state director of information capital, said in the report.

“In 2021, the record number of homes sold were demand-driven transactions and that demand was influenced greatly by companies continuing to target the region for job creation and expansion," Sprague said. "Even though more homes are being built, listed and sold than ever before, our region is still nowhere close to having a comfortable amount of supply to meet the demand, which is why home prices continue to rise steadily.”

Over 23,000 jobs have been promised by companies across the metro as of December 2021, breaking the 2020 record, according to Opportunity Austin, the economic development arm of the Greater Austin Chamber of Commerce. With an influx of major factories and offices, including Tesla's Giga Texas, Samsung's Taylor plant and a planned 33-floor Facebook office, Sprague said the region's booming market paired with a struggling inventory and supply chain issues could be a double-edged sword in 2022.

"In short, 2022 will see a robust market for home sales and property values, but the region must do more to address inventory, ” Sprague said.

Shiflet recommended that potential homebuyers make a decision ahead of predicted increases in interest rates and home prices and said that he hopes local politicians will continue to prioritize affordable housing in the election year.

Still, Shiflet said a record-breaking housing market reflects Austin's growing reputation as a hub for talent, tech jobs and a good quality of life.

"With all the new jobs across the region from exciting companies like Tesla and Samsung, Austin was put on the world’s stage and captured the hearts and attention of so many," Shiflet said. "We are lucky to call Austin our home when it has so much to offer from a great quality of life to a wonderful destination for innovation and opportunity.”