Real Estate Market Report
AUSTIN, TX — The Austin-Round Rock MSA experienced a decline in residential home sales, while a slight increase in housing inventory coincided with a new all-time record for median sales price, according to the Austin Board of REALTORS® March 2022 Central Texas Housing Report.
Property Tax Vote on May 7th
On May 7, Texas voters will have the opportunity to approve a constitutional amendment to increase the homestead exemption from $25,000 to $40,000. The increase will take effect for the 2022 tax year if passed.
The legislation to put the measure to a public vote passed unanimously in both chambers of the Texas legislature during the third special session in 2021.
According to the bill’s author, the increased homestead exemption will save the average homeowner $176 annually.
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Soaring Property Appraisals = Increased Property Taxes
Texas property owners recently received their property appraisals in the mail. In Travis County, the value of residential properties increased 56% compared to last year.
Fortunately, homeowners who occupy their home have a homestead exemption, so the increase is limited to 10% every year.
Investors with rental properties do not have that 10% homestead exemption cap. Therefore, landlords may want to protest their property taxes if they find that the assessed values of their rentals have gone well above market value.
Purchasing Power Reduced by Higher Interest Rates
As interest rates increase week after week, homebuyers experience a reduction in the home price they can afford.
At the beginning of the year, with a 3.22% interest rate, a homebuyer wanting a monthly payment of $3,500 could afford a home worth $807,267.
Now, with interest rates above 5%, that same homebuyer wanting a $3,500 monthly payment can only afford a home priced at $643,898.
Austin sees biggest spike in mortgage payments in the U.S.
Among the country’s 50 biggest metro areas, Austin saw the biggest rise in mortgage payments from March 2021 to this March 2022, according to a new report from real estate platform Zillow.
The report shows a year-over-over change of 63.5% in the typical Austin-area mortgage payment. That figure is based on principal and interest for a 30-year, fixed-rate mortgage with a 20% down payment. That compares with a nationwide jump of 38%. Zillow pegged the Austin metro area’s typical monthly mortgage payment at $2,299.
Homebuyers are facing a one-two affordability punch this spring: Quickly rising mortgage rates are compounding affordability challenges that have been brought on by record home value growth.
Planned 74-story Austin Skyscraper Could Be Tallest in Texas
The tower is expected to surpass 1,000 feet tall.
Construction on a new skyscraper in Downtown Austin’s Rainey Street area is expected to start in the next few months and, according to the Austin American-Statesman, the tower would become the tallest in Austin and maybe the entire state.
Lincoln Property Co. and Kairoi Residential are developing the 74-story building, which will be located at 98 Red River St.
The building will consist of 352 apartments, 686,000 square feet of office space and a 251-room hotel.
The project has also not been officially named yet, but more details are expected to be released in the coming weeks.
The City’s New Tallest Residential High-rise
The Conrad Austin hotel and Conrad Residences Austin luxury condos will occupy a 65-story tower that will be built at 311 E. Second St., near West Cesar Chavez and Trinity streets in downtown Austin.
The project will feature 326 hotel rooms and 136 one-, two-, three-, and four-bedroom condos, as well as nearly 10,000 square feet of restaurant space and 1,000 square feet for a cocktail lounge.
At 750 feet high, the Conrad high-rise will be the tallest residential or hotel building in Austin.