By Mary Lynne Gibbs • 2018 Director
It was May 23, 1973, when my parents closed on their home and our family moved back to Austin. The final sales price was $34,582.75. Wow, how times have changed since my teenage years.
Fast forward to May 2018, when the Austin Board of Realtors reports the median price of a home in our city is $389,000, a figure fewer and fewer can afford.
Recently I attended a mid-year economic forecast with speaker David Tandy, president of Texas National Title, who stated that if home prices continue to increase at 5 to 7 percent per year, combined with our population growth, then affordability challenges will continue, and rentals will grow.
As REALTORS we all are feeling this impact and realize that more and more of our first-time home buyers are seeking housing on the outskirts of Austin due to affordability. The challenge for them is often whether to accept a longer commute into work or trade off with less square footage closer in.
Affordability also is taking a hit due to interest rates, which had been historically low but are now rising. Communicating this shift with our buyer prospects may encourage them to act more quickly to enable them to benefit from homeownership sooner rather than later.
While native Austinites who have witnessed home prices skyrocket may feel as though housing affordability is diminishing, Austin is reasonable when compared to the national market. According to PayScale, our city is 3 percent below the national average cost of living and the cost of housing is 15 percent below the national average.
“In many other large cities, the cost of housing is well above the national average, regardless of the overall cost of living,” according to PayScale. “It’s no wonder that Austin is one of the most popular cities in Texas.”
So while home prices have risen astronomically over the past 45 years, smile and realize it could be worse! RL