AUSTIN, Texas - Homes in Austin continue to lead the pack when it comes to price growth. "Just an astounding amount of growth, it’s really unheard. It’s been leading the nation and price growth all year and home prices are up more than 40% since 2020," said Daryl Fairweather the chief economist at Redfin.
It is not just Austin, the surrounding area, like Del Valle, the place where Tesla is currently building their Gigafactory, is also seeing high growth in home prices. "For the Del Valle area, home prices are up even more than the rest of Austin. Home prices are up 45% since last year so it just goes to show that that particular area is extremely hot," said Fairweather.
Since the pandemic began, Fairweather said they’ve been seeing a lot of people move to Central Texas from cities like LA and San Francisco, so they aren’t surprised companies like Tesla are also jumping in and calling the area home.
"Even before the pandemic, Austin was becoming a larger tech hub and I think the pandemic really pushed it over the edge because a lot of employees were able to work remotely and chose to move to Austin and companies took notice. You know Texas has no state income tax has a large base of tech workers to begin with."
Even going further out east, the price boom can still be seen. "Bastrop home prices are up 39% since last year so still higher than other parts of the Austin Metro but not near as high as Del Valle."
When compared to the rest of the nation, Fairweather said the price increase here are unheard of. "It’s completely outrageous, to be honest, home prices throughout the country are up about 20% since last year which is really record-setting price growth."
With price growth comes concerns homeowners need to be aware of. "People are going to see their property taxes increase because their homes are now worth more than they were before. Since Texas doesn’t have a state income tax it gets a lot of its revenue from property tax so that could be a big shot to people," said Fairweather.
Redfin predicts continued price growth for Central Texas homes into next year but not near the extent of where they are at now.
Fairweather said now is the time for these surrounding cities to act when it comes to building affordable housing as well as transportation, before this growth becomes too big to handle.