May 2016 Real Estate News Roundup

Most of the nation is seeing positive trends in residential real estate as we head into the busy summertime real estate season. But, across the nation, affordability remains a big concern as home prices are easily outpacing the growth of wages.

These factors are particularly pronounced in Austin, where prices have risen at a rapid pace for years. And that’s translating to the fast-growth of suburban areas and the rapid uptick in residential home sales in areas like Cedar Park, Pflugerville and even many unincorporated areas in Central Texas.

But people still love downtown — both in Austin and cities across the nation — as demand for urban areas pushes prices up and is fueling the creation of more micro units that offer affordable urban living in living spaces ranging from 200 to 500 square feet.

Let’s take a look at the top real estate stories in May.

American Housing Market Continues to Grow

Residential home sales in the U.S. climbed by 6 percent in April compared to the same month a year prior, the Wall Street Journal reported. It’s the second month in a row the housing market has shown signs of growth nationwide. That uptick may not sound huge, but it represented the highest level since January. Demand is growing the most in lower-cost areas, including the Midwest. And that makes sense because median sale prices of homes, excluding new construction, climbed to $232,500 — about 6.3 percent higher than April 2014. That’s generally outpacing the growth of wages, sending more buyers toward more affordable areas.

Even Austin’s Unincorporated Areas are Booming

Everyone knows that Austin has been growing at a rapid rate for more than a decade. And it’s easy to see the growth of suburban areas, as well. Now, we’re learning that that growth has also been reflected in areas that are a little trickier to track — those not represented by a city government or inside any city limits. Unincorporated parts of Travis County grew at 12.5 percent between 2010 and 2015, the Austin Business Journal reported. That’s faster than the incorporated parts of any other county in Central Texas. Hays County, meanwhile, had the fastest non-city growth between 2014 and 15, with a 3.6 percent uptick in population, Census stats show. And, while the Austin area’s growth continued and crested the 2 million mark, it was Georgetown that landed the distinction of fastest-growing city in the U.S. With both Pflugerville and New Braunfels also near the top.

The Latest Trend in Austin: Tiny Apartments

The rapid increase in housing prices, paired with a movement toward minimalism and sustainability, is leading more people to seek out small-scale living situations. In June, Transwestern Development Co. plans to break ground at 1648 E. Sixth St. on its new Indie Apartments, which include 139 units, consisting mostly of 350-square-foot studio units and 520-square-foot, two-bedroom units. That comes as companies like Kasita are building even smaller micro units that could be moved from city to city, and the addition of 260 units under 450 square feet at the Spire on East Fifth St.

Urban Home Values Climb Alongside Commercial Developments

The revival of downtowns and neighborhoods just outside of them is back in full force after years of major shifting toward suburban areas. And that downtown rebirth, often spurred by mixed-use developments where stores offer consumer options on the first floor and residential units sit above, has led to a strong uptick in downtown prices in many markets. Now, urban home values are outpacing suburban homes by more than 2 percent on average across the nation, according to a new report by Zillow.

China’s New Love: Investing in U.S. Real Estate

China’s economy may look a little rocky from afar. But that’s not slowing the nation’s wealthiest from making big moves in the American real estate market. The total investment between 2010 and 2015 floats around $300 billion. Of that, about $93 billion was in residential real estate — the remainder being mortgage-backed securities and commercial properties, Reuters reported. And the spending on homes is notably larger than what other international homebuyers put in. The average home price Chinese buyers paid last year was $831,800 — a big jump over the $499,600 average other international buyers spent. A lot of that is attributed to Chinese investors buying in expensive areas, including California, New York and Washington.