According to Kevin Burns, an Urban Land Institute member and CEO of Urbanspace, a boutique real estate firm in Austin, the growing number of both luxury rentals and renters in Austin exemplifies a trend in cities across the nation – “a bifurcating housing market.”
Burns recently told Curbed’s writer Patrick Sisson, “While many indicators pointing to a slowing housing market plus the production of affordable units lagging behind the nation’s unmet need for millions of low-cost units, luxury condominiums and homes in dense downtown districts continue to be popular investments.” Burns continued. “Those buying condos downtown look like Benetton commercials. It feels like we have residents from newborns to 80’s, all who have said, ‘To hell with the suburbs.’”
In Texas, high-end rentals have exploded over the last decade. Take a look:
- +142% in Austin
- +91% in Dallas
- +73% in San Antonio
- +59% in Houston
Dallas saw the third highest per-capita spending on multi-family new construction in 2018, behind Denver and Seattle. And, in Dallas-Fort Worth, some 4,000+ super-luxury living units are in the pipeline. Clearly, according to Igor Popov, the chief economist with ApartmentList.com, growth in multi-family development has outpaced growth in single-family homes due to the demand for upscale urban living.
Home value and inventory growth in the Long Horn state’s lux condo market looks like this, according to the Dallas Business Journal:
- Austin – +12% in value and +46.8% in inventory plus Austin’s Barton Creek neighborhood became the fist in TX to have a median home value of +$1M ($1.021,760 according to Trulia)
- Dallas – +13.9% in value and +59.7% in inventory
- Houston – +13% in 2018 and +15% in 2017 for the $750,000+ market
- San Antonio – one of fastest growing cities in the nation with explosive demand and brisk sales for units between $500,000 – $800,000
Luxury home sales are also exploding in TX, according to Joshua Roberson, senior data analyst with the Real Estate Center at Texas A&M University:
- Austin – $1M home sales +23% in 2017 and +13% in 2018
- Dallas – $1M home sales +24% in 2017 and +14% in 2018
- Houston – $1M home sales +11% in 2017 and +7% in 2018
- San Antonio – $1M home sales +22% in 2017 and +21% in 2018
Sisson wrote in this recent piece for Curbed that despite the Wall Street Journal indicating that Dallas real estate was like a “canary in a coal mine,” downtown real estate “…seems poised to remain a high-end destination.”
Urbanspace’s Kevin Burns agreed. “We (in Austin) are the closest you can get to California without state income tax.” And because of the Austin presence Facebook, Apple, Google and other tech and oil companies, “there is no shortage of wealthy clients.”
