NW Austin home sales unfazed by affordability

AUSTIN – In Northwest Austin, where home sales and appreciation continue to rise, homebuyers have not been fazed by the sticker shock of increasing home prices.

Homebuyers are willing to pay more for location, quality homes and established trees. This is despite a 13 percent jump to $223,000 for the citywide median home price from September 2012 to September 2013.

Jim Gaines, a research economist with the Real Estate Center at Texas A&M University, said rising home prices mean residents need more income to afford the median-priced home in Austin.

Austin’s affordability index peaked at 2.38 in 2011 and dropped to 2.09 for 2012, meaning that homes are generally still affordable. Gaines said that because home prices and interest rates continued rising in 2013, he expects Austin’s ratio to drop in the vicinity of 1.8 to 1.9 for 2013.

In the Austin metro, the median new home price is $240,000, up from $200,000 two years ago. The greatest growth has been in the $300,000–$500,000 range for new residential construction projects, which has doubled since 2010.

Rental occupancy has been above 95 percent in Northwest Austin since 2011. Job growth and increased traffic congestion have contributed to many residents choosing to lease closer to work or in live/work/play environments.