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Austin housing market levels up to 'new normal' after pandemic price surge

The median home sales price in the city of Austin has broken records five months in a row, according to the Austin Board of Realtors. (Wikimedia Commons)

The local housing market remains on fire.

The median Austin home sales price increased 42% year-over-year to $575,000 in June, setting a new all-time record for the fifth month in a row, according to the latest market report from the Austin Board of Realtors, which was released Thursday.

This trend extends across the five-county Austin metro, where the median home sales price rose 43% year-over-year to $482,364 in June, also setting a new all-time record for the fifth month in a row.

The skyrocketing prices reflect increasing demand as well as low supply. "Our market has established its own new normal, as median prices club while inventory remains low," ABoR President Susan Horton said in a statement. "With the unprecedented growth our region continues to experience, we can expect these trends to continue."

The nature of housing demand has evolved since the advent of the pandemic, with buyers looking for more space and recent transplants drawn in by Austin's relative affordability compared to coastal markets, according to Dr. Jessica Lautz, vice president of demographics and behavioral insights for the National Association of Realtors.

"Remote work, along with incredibly low-interest rates, has allowed buyers to purchase homes in suburban areas that provide more square feet, outdoor space and increased buying power than in urban core areas," Lautz said in a statement.

Although supply remains low—with just 0.6 months of inventory in June, where experts say a health market would have six months' worth—there was a 24% year-over-year uptick in new listings last month, according to the report.

But affordability remains a concern. The median sales price in the city of Austin has increased $168,000 since June of last year, sharply curtailing the number of residents who can break into the housing market. Aspiring homeowners have turned to the rental market, driving up costs there, too.

"While we're encouraged that housing has led to our region's economic recovery, action must be taken to bring more units online to meet the demand for housing and address affordability," Horton said. "Addressing this challenge head-on and prioritizing housing will go a long way to ensuring that our local economy remains healthy, our market reaches a more balanced position and more people have access to homeownership."


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