search

The Real Deal Logo

Trending

Glossier founder is buyer of $22M Brooklyn townhouseGlossier founder is buyer of $22M Brooklyn townhouse“I wouldn’t use it, I would just lock the door”: Landlords pan new rehab law“I wouldn’t use it, I would just lock the door”: Landlords pan new rehab lawHousing deal finally passes; here are the detailsHousing deal finally passes; here are the detailsDevelopers have a new tax break. Now they must figure it outDevelopers have a new tax break. Now they must figure it out
Residential
Austin

Austin on track to surpass Houston — and maybe DFW — in luxury home sales

The Texas capital has long trailed far behind the bigger metros in home sales over $1M

Austin luxury housing
(Illustration by The Real Deal with Getty Images)

When it comes to luxury home sales — those worth $1 million and above — Austin has never had the glitz of the state’s oil-fueled metros to the north.

Since the start of the pandemic, however, the state capital has gained significant luster, according to the Austin-American Statesman, citing a report by the Texas Real Estate Research Center at Texas A&M University.

While the luxury-home markets in Texas’ four largest metro areas — Dallas-Fort Worth, Houston, San Antonio and Austin — have all seen significant growth over the past few years, Austin has shown “particularly strong momentum,” according to the report.

From January through May this year, the number of homes priced at $1 million or more sold in Austin was almost double the number sold in all of 2018. Meanwhile, during this same period, the number of luxury homes that sold in Houston, Dallas-Fort Worth and San Antonio, was about the same compared to four years ago, said Joshua Roberson, lead data analyst with the Texas Real Estate Research Center.

“The latest luxury boom is a milestone,” Roberson said. “It signifies how [Austin’s] profile among other major cities has elevated during COVID.”

Back in 2018, Austin had half the luxury sales of the Houston and the Dallas-Fort Worth areas. By 2021, however, Austin was only slightly behind Houston. This year, with the two cities virtually neck-and-neck, Roberson expects Austin to surpass Houston in luxury sales.

Sign Up for the undefined Newsletter

Read more

“What makes this all the more remarkable is that Austin’s population is only about one-sixth the population of Houston and one-seventh that of [Dallas-Fort Worth],” according to Roberson, who noted that DFW has led the state in sales of luxury homes for five years in a row.

Migration booms in Austin and Dallas — particularly among higher-income households — have provided steady growth for the state’s overall luxury market overall, he said. “In particular for Austin, the city has benefited greatly from a surge in highly educated, highly paid out-of-state migrants from coastal areas where housing is far less affordable.”

Beth Drewett, an Austin-based real estate agent with Compass, agrees. She says Austin “hits the mark for a variety of buyers, from the executive relocating for work, the power couple that can work remotely, to the grandparents that can afford a second or third luxury home to be near family.”

On the flip side, sky-high mortgage rates have somewhat cooled the Austin-area housing market in recent weeks. Home sales dropped by double-digit percentages in June in both the five-county Austin region and within Austin’s city limits; pending sales plunged; listings are climbing; and some sellers are reducing prices.

— Maddy Sperling