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Residential
Austin

Investors flock to buy single-family housing in Texas capital

Flippers become landlords in new Austin home market

(iStock)
(iStock)

The housing market in Austin, Texas, has become famously tight in the past decade.

Now investors are making home buying even more of a challenge, Austin NPR station KUT reported. Last year, investors bought about one-third of the single-family houses sold in the Austin-Round Rock metro area, according to a CoreLogic report.

That’s a big leap from the previous decade, when investors accounted for less than 20 percent of single-family homebuyers in the area. By CoreLogic’s definition, an investor is either a non-individual that buys a home or a person that buys three or more homes at the same time.

The move makes sense for investors, as the population of the Austin area has risen at a steady clip—around 3 percent annually—in the past 10 years, while new construction hasn’t been able to keep up with the need for housing for rent or for sale—a problem exacerbated by recent supply-chain issues. At the same time, rents are rising faster than ever.

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The combination of high rents and limited housing supply makes investors inclined to buy, renovate and hold on to Austin rental homes rather than flipping them as they did in the past. A recent surge in home prices also makes a good return on the investment seem likely. Austin is also one of the top locations for the development of single-family homes intended for rental rather than purchase.

Institutional investors bought about 10 percent of Austin homes sold in 2021, according to a report cited in the article. It’s not clear how many of those homes were condominiums and how many were in the single-family category—i.e., homes with fee-simple ownership. That percentage has also risen in the past few years. Until recently, institutional investors in single-family homes were more active in Atlanta, Phoenix and Tampa.

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[Austin NPR station KUT] –Cindy Widner  

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Investment SalesRental Market