As the third youngest state in the United States, Texas is seeing numerous changes in regards to population growth, demographics, and housing.
According to Dr. James Gaines, from the Texas A&M Real Estate Center, 2016 was a transitional year after the end of a five year boom. Both jobs and population grew and are showing a continuation of that growth in 2017. Annual jobs in the Austin-Round Rock Area presented a slower job growth of 2.8% increase in May 2017, and between 2015 and 2016 the Austin-Round Rock area added an average of 160 people per day.
While growth is good, if the state and local resources cannot keep up with it, the growth will become more pressing. Cities will not only need to manage the growth, but they will need to start planning in advance. “That’s why apartments keep popping up” said Dr. Gaines. With a median age of 34.2 years in Texas, more and more people are renting houses or living in apartments. According to the US Census Bureau, 21.8% of the Texas population in 2015 were between the ages of 20-34, and 11.7% were over the age of 65. According to Dr. Gaines, within 2010-2015, Williamson County will increase its population by 368% and will add an average of 38,850 people a year, reaching 2 million people by 2050.
These factors are starting to change the real estate market, both in respect to demographics and affordability. With aging baby boomers who are turning to rental properties and changes in life style and family formations, homeownership in the Austin- Round Rock Area has dropped from 61% in 2014 to 57.5% in 2015, according to Dr. Gaines.
With the rising house prices, in Williamson County, affordability has also been a major issue. According to Dr. Gaines, the median income is growing at a slower rate than the price of homes, as shown in the graph below.
In Round Rock alone, home prices have increased 2.9% as compared to the same quarter last year, as shown from the Williamson County Association of REALTOR® market report. The median price in Round Rock is now $254,250, with only 16.3% of houses under $200,000. Williamson County, as a whole, also increased during the second quarter of 2017 by 6.9%. According to Dr. Gaines, forty-two percent of households in Texas cannot afford a house priced higher than $150,000. The growing concern for affordable housing is not only pushing the rental markets to skyrocket, but it is also putting pressure on families and individuals to make a choice between housing and other important life matters.
Williamson County’s annual home sales increased between 2001-2016 by 68%, according to the Texas A&M Real Estate Center. About 20% of the home sales in 2016 were new home sales and the other 80% were existing home sales. This does not come as a shock, since land prices are increasing and builders are feeling the pressure to build affordable homes.
Williamson County’s monthly housing inventory is also steadily increasing. As shown in the Williamson County Association of REALTOR® market report for the second quarter of 2017, Williamson County had 2.9 months of inventory, an increase in 0.7 months as compared in the second quarter of 2016. The Real Estate Center at Texas A&M University cites that 6.5 months of inventory represents a market in which supply and demand for homes is balanced. The current market is showing a market that still leans toward favoring the sellers. The same can be seen in Round Rock, which has 2.0 months of inventory and 343 active listings in the second quarter of 2017.
Overall, with the explosion of both homes, apartments, and population, Williamson County’s economy and housing outlook is showing positive signs of growth that will need to be managed and planned for by city leaders.