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Longtime Austinite Carlos Garza has recently toggled between the local rental and housing markets. He sold his Southwest Austin home last October, after living there for around a decade. Within two days of listing the property, it had received multiple offers; he ended up accepting an offer slightly above asking price within the week. "We were very pleased with the process," he told Austonia.
Since selling, Garza has rented an apartment while he decides what he'd like in his next home. Although it was a bit of sticker shock compared to what he paid to rent 10 years ago, he knows that rent is "relatively low" compared to recent years.
Since the pandemic began, Austin's housing and rental markets have taken divergent paths. Across the five-county metro, the median sales price increased nearly 20% to $365,000 year-over-year, according to the Austin Board of Realtors's latest market report, which was published Thursday. Between March and December of 2020, however, the local apartment market slumped, with both rents and absorption rates in decline compared to the previous year, according to ApartmentData.com's February report. These trends are good for sellers and renters but cause challenges for prospective buyers, who face steep competition and high prices, and landlords.
"The main reason is the bifurcation of the economy," said Dr. Luis Torres, a research economist at the Texas Real Estate Research Center at Texas A&M University.
On the up and up
The Austin housing market was strong going into the pandemic and quickly rebounded due to a number of factors: continued job creation, especially in the tech and professional services sector; a healthy rate of relocations; a millennial-heavy population, with many members starting families and looking for more space at home.
"Because of the pandemic we saw an enormous amount of families decide after 90 days living in one tiny space with no backyard, 'Oh my gosh, we need to make a change,'" ABoR President Susan Horton told Austonia.
In addition to sustained demand, the housing market has long faced low supply. This is good for sellers, like Garza, but provides challenging when they need to buy a new home in turn, prompting some to rent in the short term.
During the pandemic, this challenge has been exacerbated as potential sellers, worried about the risk of exposure to COVID and the challenge of finding a new place to move into, held off on listing their homes, pushing prices even higher.
"Despite developers building as quickly as they can throughout the region and more than 6,000 homesites projected to come online within the next six months, the overall number of lots in development is only just able to keep up with current demand," Zonda's Austin Regional Director Vaike O'Grady said in a statement Thursday. "This means that homes will continue to sell as soon as they hit the market, and prices will continue to rise steadily in the months to come."
(Austin Board of Realtors)
The success of the Austin housing market indicates that prospective homebuyers have largely been shielded from the financial impacts of the pandemic, Torres said. Demographically, this crowd typically tends to be more educated and earn higher income than renters. Since the pandemic began, they are also more likely to have had the option to work from home, which may make a move to the suburbs more appealing—both for the additional space and because there's no commute to worry about. There's also the added benefit of historically low-interest rates. As a result, he said, "People who were renting became homeowners."
The apartment market slump
The local rental market was impacted in almost the exact opposite way: its target audience was more likely to have suffered job loss as a result of the pandemic or to work in an industry that did not allow for social distancing, such as hospitality, and a glut of new construction in recent years meant that supply outpaced demand.
Unlike the housing market, which has seen record-low levels of inventory, the rental market was "saturated" with available units, Horton said.
This graphic, from ApartmentData.com's February market report, shows how rent and occupancy rates have fallen in Austin over the course of the pandemic.
This is good for tenants. "It's a great time to rent right now generally because prices are down nationally," Apartment Guide Managing Editor Brian Carberry said.
But it's tough for landlords, whose tenants may be transitioning to homeownership or in need of rental assistance, according to the Austin Apartment Association's state-of-the-industry report, which was released Feb. 1. "By most measures, single-family is outperforming multifamily, due to the pandemic-related demand for more spacious residences in suburban locations that accommodate learning and working from home," TXP President Jon Hockenyos said in the report.
The advent of COVID-19 has also led to job loss and reduced retail sales. "These loss-of-income and consumer behavior trends produced a double-whammy effect on the apartment industry, which houses many hourly-wage workers needing housing assistance," AAA President Emily Blair said in the same document.
But things could be worse, Torres said, pointing to the role stimulus checks and unemployment benefits have played in keeping the rental market from slumping even further. He also added that, as the pandemic lessens—and unemployment rates and business restrictions do the same—there will likely be a rebound. "When we start seeing all of these things, I think the apartment market will be much better," he said.
When this happens, the rental market's surplus supply will come in handy. Meanwhile, low housing inventory coupled with the likelihood that interest rates may soon begin to rise could spell a slowdown in that market, Torres said. But he added: "It's still going to be strong."
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With more research done on the COVID-19 Delta variant, Austin Public Health is upping its goal of 70% vaccinated to at least 80% due to the extreme virality of the strain.
As more Delta cases are identified—up to 29 cases are confirmed in Travis County—health officials are urging the unvaccinated to get their shots to contain the spread and relieve hospitals from reaching full capacity.
Austin-Travis County surpassed the Stage 5 threshold on Friday and has reached a seven-day average of 61 hospital admissions. However, Austin health leaders have yet to make an official shift as the Delta variant calls for new guidance, APH Health Authority Dr. Desmar Walkes said at a joint Travis County Commissioners Court meeting on Tuesday morning.
The new guidance has yet to be released, but Walkes said it will take into account the viral load of Delta on both unvaccinated and vaccinated people.
Last week, the Centers for Disease Control and Prevention revealed the Delta variant was as contagious as chickenpox, which has a herd immunity threshold of at least 90% vaccinated.
Although 63.42% of those eligible in Travis County are fully vaccinated, breakthrough cases—where vaccinated people are contracting COVID-19—are being identified. APH has identified 1,496 breakthrough cases of the roughly 800,000 vaccinated. Most breakthrough cases are showing less severe symptoms or are asymptomatic, according to APH.
Health officials are still asking residents to wear masks, although the city cannot mandate any masking orders due to an executive order by Texas Gov. Greg Abbott.
"Our challenge is going to be whether we're going to stand as a community and everyone who can get vaccinated, get vaccinated, and everyone where a mask—that's what it's going to take," Walkes said.
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Save Austin Now police petition will reach November ballot after county clerk certifies 25,000 signatures
Save Austin Now is now 2-0 over Austin City Council after its petition to add more staffed police officers to the Austin Police Department was certified, garnering over the 20,000 votes needed to make it on an election ballot.
The petition calls for more police staffing per city resident, quicker response times and more training for city police officers in the wake of increasing violent crime rates nationwide and a year of limited APD staffing. The City Council will now decide whether to implement the ordinance outright or add it to the November election ballot; it will likely do the latter.
Over 25,000 of the 27,778 signatures racked up by the public safety petition were certified as valid, well over the 20,000-vote threshold required to be certified with the City Clerk. City Clerk Jannette Goodall placed the city's seal of approval on the petition on Tuesday morning.
The petition, by the same political group that got the camping ban reinstated through a petition in May, seeks to:
- Require minimum staffing of two officers per 1,000 residents
- Require a minimum standard of 35% community response time
- Add 40 hours of training
- Require city council members, Mayor Steve Adler and other city staff to enroll in the Citizens Police Academy
- Facilitate minority officer hiring through foreign language proficiency metrics
Austin's 160 patrol vacancies have dropped its staffing rate to 1.2 officers per 1,000 residents, according to the department. APD's response time has increased by about one minute and 50 seconds in a year.
The petition comes nearly a year after APD's budgets were slashed by city council following the summer's Black Lives Matter protests, which saw several demonstrators severely injured as millions called for justice in the police-related deaths of George Floyd and locally Mike Ramos, an unarmed Black man killed by APD officer Christopher Taylor, in April 2020.
Austin and the U.S. have experienced a widespread uptick in violent crime rates in 2021. The city has reached 49 homicides in 2021, higher than the total number of murders in all of 2020 and the 38 homicides in the city in 2019. Austin police officers have seen response times rise as the department suffers increased vacancies and fewer newcomers while cadet classes are being readjusted.
Opponents argue the ordinance would ramp up a policing budget while taking away from other departments including Fire, EMS, violence prevention, and mental health care. City Council Member Greg Casar, the Travis County Democratic Party and the Austin Justice Coalition have spoken out against the organization's latest public safety move, calling out the campaign as a "right-wing petition" that misleads those who sign.
🔥 PANTS ON FIRE: Republican-front group Save Austin Now is lying about their petition!
They say their measure is about police reform, when it's really about devastating our city budget - all for the benefit of the police union. Watch the video here ⬇️ #ATX pic.twitter.com/Z6QQSfhHfH
— Gregorio Casar (@GregCasar) August 2, 2021
The latest battle between city council and Save Austin Now will be decided by Austin residents in the Nov. 2 election.
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Austin City Limits fest and iHeartRadio Fest are the latest festivals to announce the removal of rapper DaBaby, who has come under fire for homophobic comments made during a recent festival.
The 29-year-old rapper, whose real name is Jonathan Lyndale Kirk, was dropped by Lollapalooza just hours before his set on Sunday, followed by the Governor's Ball in New York and Nevada's Day N Vegas after making unsolicited comments about men with HIV/AIDS at the Rolling Loud Festival in Miami. Rolling Stone Magazine confirmed with iHeartRadio organizers that DaBaby will no longer perform.
DaBaby will no longer be performing at Austin City Limits Music Festival — lineup update coming soon. pic.twitter.com/jAYfdJFxJf
— ACL Festival (@aclfestival) August 3, 2021
There is no word on who he will be replaced with yet, though rumors on ACL's subreddit, r/aclfestival, are saying they expect Tyler, The Creator, who performed at Lollapalooza. Kirk will be replaced at Day N Vegas by rapper Roddy Ricch.
Kirk later backtracked his offensive statements on his Instagram story, but again faced criticism for not exactly apologizing.
After facing a second round of backlash for his Instagram statements, the rapper posted on Instagram, saying:
In addition to being dropped from the festivals, DaBaby has been denounced by fellow celebrities like Dua Lipa, Madonna and Elton John.
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