Austin could become the most expensive city outside California by the end of the year.
The city is not what it used to be. It is no longer a place where middle-class families can live, play and work. Buying a home in Austin is an investment that is not available to families anymore.
According to the Austin Board of Realtors, the median home price in Austin soared to $536,000 in October, up from $441,250 a year ago. That's a $94,750 or 17.67% increase, and the market is continuing to trend up, which is horrible news for every working family in the area.
Zillow warned anyone who wants to move to Austin to be prepared to spend 30.1% of their income on a mortgage. Nicole Bachaud, who works at Zillow as a Market Analyst, added, "By December, Austin will become less affordable than Seattle, Miami, and New York. The only markets that will be less affordable than Austin at the end of the year are all in typically pricey California: Riverside, San Diego, Los Angeles, San Jose, and San Francisco."
More expensive than New York City
Laura Figi states that this unhealthy trend is driven by people who are moving from California, "An influx of California migrants, which Zillow calls the "Great Reshuffling," have historically come in with larger salaries in search of the cheaper property. People who are used to paying higher prices for lodging may be able to stomach the housing increase, but many Austin residents will not."
This is a scary trend, and city officials should work closely with developers and update Austin's planning and zoning ordinances to allow more affordable homes for middle-class families.
However, Zillow continues to rank the city as a top destination for celebrities and wealthy people, but the city will no longer be affordable for anyone else.
The five most popular zip codes in Austin.
- Westlake area, 78746, - Typical home value: $1,846,927
- Central Austin, 78703 - Typical home value: $1,480,800
- West Austin, 78733 - Typical home value: $1,169,549
- West Austin, 78730 - Typical home value: $1,140,974
- North Austin, 78731 - Typical home value: $1,134,961
You can see that these prices attract the wealthy to the city and keep the middle-class Americans away. Many great thought leaders live, work, and play in Austin. For example, Forbes Magazine reported seven billionaires lived or moved to Texas in the last ten years, including Elon Musk.
After moving to Austin, Tim Ferris said, "After decades in Silicon Valley as an entrepreneur and investor, I found Silicon Valley to be too 'closed-minded' and moved to Austin, Texas to network with like-minded entrepreneurs."
So, Austin is a great destination for the wealthy but not for middle-class families.
Would you move to Austin?