by Dana George | Published on July 18, 2021
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Although prices are climbing, it may be a good time to buy.
When considering a home purchase in Austin, Texas, it's easy to wonder if the prime opportunity has already passed you by. Whether you're a first-time home buyer or have purchased many homes over the course of your lifetime, you don't want to overpay and end up with a mortgage for more than the property is worth. And that can happen -- in some cities. Austin is unique for a lot of reasons, though. Here, we'll cover why you may still want to get in on the Austin housing market, appreciating values and all.
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U.S. News & World Report recently ranked Austin one of the best cities in the U.S. to live. Using a mix of economic and social data points, the publication ranked cities across the U.S. to determine quality of life, and it was Austin's quality of life score that shot it to the top of the rankings.
It's no secret that Austin is a haven for outdoor enthusiasts, music lovers, foodies, and well-educated millennials. And the factors that go into Austin's quality of life score aren't going away anytime soon.
Yes, the overall attraction of buying a home in Austin is impacted by prices that have recently appreciated at a rate of 3.5% a month, according to the Austin Board of Realtors (42% over the last year). But what sets Austin apart is that there does not appear to be an end in sight. Buy a home today, and you are likely to get in on appreciating values.
Last year, Inc. Magazine named Austin the best place in the U.S. to start a business. Not only is Austin one of the best-educated cities in the U.S., but it has a large number of residents between the ages of 18 and 44 who are motivated and ready to work. In addition, because Texas has no state income tax, owners end up with extra money in their bank accounts that can go back into building their businesses.
It doesn't matter whether you plan to own a business or not. The fact that Austin is such a lure for business owners increases the odds that property values will continue to rise.
Austin has it all when it comes to raising a family: well-ranked schools, a multitude of outdoor areas to enjoy, culture, and great food. And if you're not planning to have a family, the fact that Austin is attractive to those with children is still good news for the value of any property you purchase.
According to LinkedIn, Austin had a higher net migration rate than any other city in the U.S. in 2020. That means that more people are moving into the city than anywhere else. Plus, many new residents are coming from Silicon Valley, where home prices are easily three times as much. These are the types of buyers who are likely to continue driving home values upward.
An annual survey by the Association of Foreign Investors in Real Estate found that nearly one in four survey respondents ranked Austin as the top U.S. market. Last year, the city came in at number 10. What's more, it was the first time a smaller metro area has ever ranked in the top three cities of interest to investors. Simply put, Austin is hot with foreigners, too.
The surge in Austin home values is not a new phenomenon. NeighborhoodScout research shows that Austin real estate has appreciated more than 102% over the last decade, giving Austin homes an average annual appreciation rate of 7.28%. That puts the city in the top 10% nationally for appreciation, and it keeps mortgage lenders busy.
Austin truly is unique. But despite all evidence showing Austin real estate represents a safe financial bet, the decision to buy should be based on whether a new home fits neatly into your monthly budget and how much you want to live in one of the most attractive cities in the country.
Chances are, interest rates won't stay put at multi-decade lows for much longer. That's why taking action today is crucial, whether you're wanting to refinance and cut your mortgage payment or you're ready to pull the trigger on a new home purchase.
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