AUSTIN (KXAN) — The news keeps getting worse for Austin home buyers.
A new report from RealtyAustin shows for the first time ever, the average price for single family homes in the Austin area is nearly $400,000, up 9.6 percent from May 2016.
For first time home buyers like Caitlin Intrator, the number seems a bit daunting.
“I’ve lived in Austin for about three years now, looking back on when I first moved here I thought, ‘Why didn’t I invest then? Why didn’t I buy then?’ I just didn’t know if I wanted to stay here,” Intrator says.
After establishing a career and falling in love with Austin, Intrator decided she wanted to stay and turn from a renter into a buyer. Over the last three months, she has viewed 60 properties with no luck.
“I put down four offers, the first one I got beat out by somebody with a higher offer and cash,” Intrador said. “It’s just like good luck trying to live in a close in location. If you want to live in central Austin, be ready to pony up.”
Local realtors say it’s what economics has always taught us about supply and demand. There’s not enough homes in the city to support the number of people looking to buy — pushing prices higher and higher.
“With the current cities development and their permitting process, it’s not easy to just add additional infrastructure and density and so the city can only grow in certain areas,” said Paul Smith with Twelve Rivers Realty.
The city, Smith says, has nowhere to grow unless you look much further outside to the northwest and northeast. He points to a potential solution by changing the land development code creating more options and less competition.
“If you take an FS-3 lot, which means that you can build two units on it and be able to put 10 units on it, I think that would help out with affordability,” Smith said. “I think that would probably raise the land value but it would bring down the unit value which is something I think Austin needs.”
Austin Mayor Steve Adler says he’s not surprised by the skyrocketing housing prices.
“This is yet another example of how we need to manage growth better to make Austin more affordable. Right now we have a supply and demand problem in that people who want to buy houses and demanding more supply,” said Mayor Adler.
The city of Austin’s plan known as CodeNEXT sets the rules and standards for things like affordable housing and mobility. In February, the city released a new draft of the development code. It was the first time in 30 years the code has been re-written to reflect the changes in Austin. In April, they put out a new zoning map, showing how each neighborhood will be affected.
Higher home prices means homeowners will ultimately pay more in property taxes and that may be the biggest concern, says Smith.
“You have families that have owned homes for a long time and their property values have gone up 60 percent, 300 percent in some neighborhoods. How is that family going to afford their property taxes? They will be forced out and to me that’s extremely concerning,” Smith said.
After a long search Intrator remains optimistic.
“I do think the growth will continue, so when I hear that number I think, ‘Yes! Can I just get in today? So tomorrow I can start reaping the benefits.”
She’s close to closing on a house and once she does, that will be her happily ever after. “If I can do this, I will feel like I can conquer the world.”