At the beginning of 2020, it was thought that this would be a booming year for real estate and Austin, Texas real estate agents would be quite busy. However, thanks to COVID-19 bringing life as we know it to a screeching halt, things may not be as prosperous as previously predicted - or will they?
In an article posted on CultureMap.com, Romeo Manzanilla, the president of the Austin Board of Realtors, said that home sales will continue to soar, thanks to the extremely low-interest rates. Also, the demand for housing will only increase as houses are sold, which means the housing market is unlikely to run into any lasting negative effects.
However, according to Mark Sprague, Austin’s Independent Title state director of information capital, he believes that if the market returns to normal within 90 days the market will continue to thrive. However, “[any] longer than that, it becomes a concern economically, because of the disruption and stoppage on revenue to multiple sources,” he states in an article posted on ReformAustin.org.
So, what does this mean for investors looking to buy property in Austin? In the past decade, Austin has been one of the best places to buy investment properties. Since 2015, homes in the city have appreciated by 33.6% from $301k to an astounding $402k. Even if the market hints that home prices may decline over the next year, it’s not that much of a concern since it’s a mere 0.7% drop.
Inventory shortage could spark bidding wars
For sellers, this is a fantastic time to put their house on the market. Due to limited inventory, bidding wars on some properties are all but a guarantee, especially if the property has desirable features such as a pool, being in a lakeside hill country neighborhood, ample storage space and so on. And, if interest rates continue to stay as low as it is right now (3.38% for a 30-year fixed-rate mortgage), investors, like buyers, will have to come in strong when making an offer if they want their offers accepted.
Economic uncertainty is a reason for hesitation
One of the most alluring reasons people flock to, or invest in, Austin is because the job market is always growing - they don’t call it Silicon Hill for nothing, after all. However, the unemployment rate has increased to 12.2% due to COVID-19. Yet, it’s believed that once the pandemic has subsided, employers are likely to invest in the Austin job market, thus bringing more jobs to the city. This could be a boon for those who are on unemployment, or even for those who are living paycheck to paycheck.
Mary Ann McMahon, owner and broker of RE/MAX Posh Properties, tells Statesman.com, “With Austin’s very strong economy, evolving population, record low mortgage rates and an economy with a 50-year low in its unemployment rate, we will continue to prosper and have forward momentum.”
Future of investing in Austin’s real estate market
Even during the best of times, investing is a game of chance that could really pay off. But, investing during (or even after) a catastrophic event that has left many industries hanging on by a thread…? It’s a huge risk, to be sure.
Austin, Texas is one of the more promising cities to invest in because the job market is always growing and people are always looking for affordable housing. While we may not know for certain what’s in store for us after the pandemic has subsided, Austin’s real estate market is capable of withstanding any bumps that would leave other cities crippled. If you need to sell your home fast in Austin, contact me today!
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