On Jan. 14, the HBA held its Annual Housing Forecast at the AT&T Conference Center. This is the single largest comprehensive economic and market forecasting event in the region for residential construction and development and one of the HBA’s most popular events, selling out year after year. A crowd of more than 740 joined us this year to hear predictions for the Austin-area housing market.
So, what is the outlook for 2020? All speakers agreed that the Austin housing market is still hot, and is only getting hotter, with this being the ninth straight year of record-setting home sales (ABoR). A continued rise in population, thanks in part to a booming job market, means competition remains tight for homebuyers, especially in the mid-range. In October 2019, the Austin American-Statesman reported that the supply of single-family homes dropped to an all-time low. Additionally, home builders are struggling to find land to develop and therefore are moving further and further outside of Austin’s core in response to demand.
Below are some additional takeaways from event host/speaker Eldon Rude of 360º Real Estate Analytics and speakers Julia Coronado from the U.T. McCombs School of Business and Capital Metro President Randy Clarke.
• Austin’s vibrant economy + falling mortgage interest rates = single-family home starts approximating levels not seen since the peak of the last up-cycle in 2006
• Builders reported strong sales throughout 2019 despite continued price increases, but there is growing concern of rising prices meaning a slowdown in sales
• The greatest demand for new homes was in the $225,000-$325,000 range
• Three new home communities in the Austin region topped 500 new home sales in 2019
• Millennials are dipping their toes into homeownership. Younger generations are making different choices, in part based on preferences and in part reflecting still tight credit and expensive housing
• To keep up with the population growth, Austin will have to consider going underground for new transportation solutions
• Transit and technology will go hand in hand to solve traffic woes. Autonomous vehicle fleets and a streamlined rider ticket/card system like Japan’s Suica card, a rechargeable contactless transit smart card, will emerge
• Investments in public transportation directly affect economic returns, jobs created, business sales, and home values near high frequency transit
It seems the only thing that could get in the way of another big year for new home sales is an unforeseen global or economic shock that would result in a sharp drop in consumer confidence.
Interested in more Austin housing market updates? The HBA invites you to join us on July 1 for the our Mid-Year Housing Forecast where we will check in on the annual predictions and how they stack up against the reality of the market.