Perhaps the biggest real estate headline in March was an unfamiliar one: Austin had a less than stellar month for single-family home sales. The less than 1 percent year-over-year growth in home sales in the metro area in February led many publications to question whether Austin’s hot streak has come to an end.
But several other larger-scale trends seem to indicate spring will bring another strong year of sales both in Austin and beyond. This month, we’ve pulled together a variety of stories pointing toward that type of growth.
For example, new home sales in February hit a seven-month high, and national housing trends show that people continue to buy houses at a growing rate despite rising interest rates on mortgages.
Now, let’s check in with some of the most important real estate stories from the month of March.
Texas Property Taxes Among Highest in Nation
Texas doesn’t have personal income taxes — one of only seven states with that policy. And that puts more pressure on other types of taxes to pay for government services and public amenities. And property tax is the most impactful one of all. A new study by WalletHub, the personal financial website, says Texas’ effective real estate tax rate is 1.9 percent. That makes it the sixth most expensive in the nation. The study showed that property owners pay about $2,578 per $136,000 worth of property.
Putting the Brakes on Local Property Taxes
State lawmakers convened in Austin for their bi-annual legislative session have been discussing a bill that would limit how much cities and counties can increase property tax rates, the Texas Tribune reports. A new bill, already approved by the Senate, would require local jurisdictions to call for an election anytime they look to take in 5 percent more in operational tax revenue than they did the year prior. But increasing property values, especially in hot markets like Austin, could hit that threshold even if the local governments don’t adjust their tax rate. The bill will head to the House next.
Austin’s Rental Market is Red Hot
A new report by HomeUnion shows Austin’s rental market makes it one of the hottest picks for real estate investors. With surging population growth, very low unemployment and new jobs coming online every day, Austin is one of the most attractive options for investors who want to build new rental units. Overall, Austin ranks ninth in terms of high demand for rental housing. And about half of the Austin’s residents already rent, which is partially a symptom of rapidly increasing home prices. The report lists Seattle, Oakland and San Diego as the top three markets with the most demand for rentals.
Austin Area Home Sales Flat in March
The pace of home sales in the Austin area was nearly flat in March, possibly signaling a cooling off after years of exceptionally high-paced activity. The leveling off in sales came as the median price of a home in the metro area increased by 6.5 percent year-over-year to $287,000. Inside Austin city limits, the median price was nearly flat compared to February 2016. And the hottest segment of the market in the city tends to be in the $750,000 and up category.
New Home Sales Climb
In another sign that the U.S. housing market has continued to improve, the pace of newly built home sales climbed to a seven-month high in February. The continued increase came in the face of rising interest rates for borrowers. The average rate of a 30-year, fixed mortgage has increased from 3.5 percent in November 2016 to 4.3 percent in mid March.
More People Working From (Almost) Home
More people are enjoying the freedoms of working at home, thanks to improved workplace communications and changes in how we work. That’s led to both an increase in interest in home office areas and in co-working spaces where remote workers and entrepreneurs can focus without the distractions of being at home. Now, more condo developments and apartments are integrating co-working spaces in the same way that many luxury hotels have added high-quality professional service areas. The trend is perhaps most pronounced in New York, where the New York Times recently spoke with several developers and workers who see co-working space as the latest amenity to have in a luxury development.