Austin Home Prices Have Risen $116,000 in the Last Year, Roughly the Cost of Two Teslas

Rhea-AI Summary

Redfin reports significant home price increases across major U.S. metros. In Austin, the typical home price rose from $369,000 in January 2021 to $485,000 by January 2022, marking a total increase of $116,000. In Phoenix, prices surged $98,750. The increase in home prices is attributed to low mortgage rates, limited inventory, and an influx of buyers from costly tech hubs. Redfin's analysis indicates a trend where homebuyers are paying amounts equivalent to purchasing luxury vehicles.

Positive

• Austin's home prices increased significantly by $116,000 over the past year.
• Redfin reports increased interest from remote workers moving to Austin and Phoenix, boosting demand.
• Record-low mortgage rates contributed to increased home buying.

Negative

• High competition has led to bidding wars, with 70% of offers facing competition, pushing prices even higher.
• Rising home prices may alienate first-time buyers, further limiting market access.

The typical Phoenix home price rose by the cost of a Porsche, and Boston prices rose by the cost of a Honda minivan, per a Redfin analysis

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — Today's homebuyer could purchase the typical Austin home for $485,000—but if it was possible to go back in time one year, they could buy a home and two Teslas for the same price, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage.

Put another way, someone could purchase both a Tesla Model Y for about $41,000 and a Model S for $71,000 for less than the $116,000 increase in the median-priced Austin home over the last year. The typical Austin home cost roughly $369,000 in January 2021. Redfin compared home-price increases from January 2021 to January 2022 in select U.S. metros with the approximate MSRP of various new vehicles.

In Phoenix, the price of the typical home increased by $98,750 last year. With the difference, a buyer could purchase a Porsche Panamera for $90,000 and still have money left over. Home prices grew more in Austin than all but two other major U.S. metros in 2021 (San Jose, CA and San Diego). Next came Salt Lake City and Los Angeles, followed by Phoenix.

The huge annual price increases are a result of last year’s red-hot housing market. Homebuyers, motivated to move by record-low mortgage rates and remote work, bid against each other for the limited supply of homes for sale. Bidding wars reached a record high in January, with 70% of Redfin offers facing competition, leading to a big portion of homes being sold over asking price.

In Austin and Phoenix in particular, another reason for skyrocketing prices is the flood of Americans moving in from other parts of the country, especially expensive tech hubs like the Bay Area and Seattle. Thanks to the pandemic-fueled rise in remote work, the number of Redfin.com users looking to move into both Austin and Phoenix from out of town roughly doubled from 2019 to 2021. Those migrants are a big contributor to rising home prices, as their homebuying budgets are significantly bigger.

“Homes that were selling for $350,000 before the pandemic are going for closer to $500,000,” said Austin Redfin agent Crystal Lopez. “My advice to buyers: If you see what seems like a reasonable price, buy it. The value will likely go up. If people wish they would have bought in Austin a year ago, next year they’re going to be wishing they would have bought now.”

Corvettes in Texas and minivans in Massachusetts

Redfin also compared home-price increases to car prices in other select metro areas:

• Raleigh, NC: The cost of the typical home increased by $87,500 last year to $400,000. The increase is roughly the cost of a Lexus LX SUV ($88,245).
• Dallas, TX: The cost of the typical home increased by $65,000 to $380,000. That price increase could buy a Chevy Corvette for $62,195.
• Boston, MA: The cost of the typical home increased by $38,000 to $595,000. The increase is enough to buy a Honda Odyssey for $34,265, with thousands left over to buy top-of-the-line car seats for the new minivan.
• Buffalo, NY: The cost of the typical home increased by $25,000 to $200,000. The increase could almost buy a Nissan Rogue SUV for $28,075.
• Oklahoma City, OK: The cost of the typical home increased by $17,750 to $224,000. The increase is big enough to buy a Kia Rio for $17,275.
• Detroit, MI: The cost of the typical home increased by $8,300 to $163,000. Motor City’s price increase is big enough to buy a Honda XR650L motorcycle for $7,000.

To read the full report, including methodology and a table showing home-price increases for several U.S. metro areas, please visit: https://www.redfin.com/news/2021-home-price-increases-compared-with-cars

About Redfin
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country's #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 6,000 people.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220311005113/en/

Contact Redfin

Redfin Journalist Services:

Ally Braun, 206-588-6863

press@redfin.com

Source: Redfin

FAQ

What was the increase in Austin home prices according to Redfin?

Austin home prices rose by $116,000 from January 2021 to January 2022.

How much did Phoenix home prices increase last year?

The price of the typical home in Phoenix increased by $98,750 last year.

What factors contributed to the rise in home prices according to Redfin?

Low mortgage rates, limited supply, and an influx of new residents from higher-cost areas contributed to rising home prices.

What percentage of Redfin's offers faced competition in January?

In January, 70% of Redfin offers faced competition, leading to homes selling above asking price.

How do home price increases in Austin compare to vehicle prices?

The increase in Austin home prices could buy two Tesla models, worth around $112,000.