It’s hard to imagine with the current economic status but a housing shortage may become a reality for Austin in the next year or two.
A combination of our rapidly growing population along with a slow down in new construction in multi-family and single family residential homes could be the leading cause. This past June, Austin was the fastest growing market, year over year, in the United States with a 1.3% annual growth rate. This can be credited in large part to the substantial amount of people relocating. It is projected that the population of Austin will increase 40,000 – 50,000 in the year 2010! That’s a slight decrease from the 55,000 we have gained every year for the past five years.
So where does the shortage come into play? Starting with multi-family residences, the Austin Planning Commission reported 975 multi-family units in projects with site plans under review and 8,885 units in projects with site plans approved. Given that it takes a year to obtain proper permitting and at least an additional year to build the complex, this poses a problem for those needing housing now.
New construction on single family housing has also slowed down in part to increases in construction material cost and financing. According to the Texas A&M Real Estate Center, “there were 6,678 Residential (single family) building permits issued in 2009 and we are on track to issue about 7,000 for 2010. By comparison, there were 17,600 permits issued in 2006”.
After all these years as a buyer’s market, could a seller’s market be just around the corner? Only time will tell…