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2021 Austin, TX Housing Forecast: Buying & Renting

property investment data chart on computer


Despite the economic downturn caused by the novel coronavirus (COVID-19) outbreak, 2020 seems to have been a pretty good year for the Austin housing market. But will 2020’s booming real estate market conditions continue into 2021? Will the capital of Texas withstand the pandemic-induced recession better than the nation’s hottest markets? These are the questions on the minds of prospective home buyers and real estate investors.

What’s the answer?

Well, according to the well-educated guesses of economic experts and leading property management organizations in Austin, 2021 is likely to witness even more changes in the real estate industry than in 2020. In fact, 1836 Property Management founder, Matt Leschber, states, “If you thought 2020 was unusual, 2021 is going to be full of even more changes, and they’re going to come faster. If you’re not working with a leader, you’re going to be left behind.”

A Continuous Climb in Home Prices


Research reports by Zillow, the leading online real estate market, have shown that Austin’s home values have gone up 12.8% over the past year and will rise 11.6% in 2021. 

It’s a no brainer that home prices will push north in 2021, albeit at a slower pace, due to supply and demand dynamics. As more and more businesses and thus more people continue to move to the greater Austin area, demand for housing is heavily outpacing the current supply that’s available.

This is not good news for tenants, as rental rates will also start increasing with home prices. In addition to the hurdle of affordability, the lower availability of Austin rental homes will also add to difficulties, as many tenants remain reluctant to move amid today’s “social distancing” culture and economic uncertainties.

And owner-occupiers are no exception to this either. In the 2021 Austin housing market, there are simply not enough properties to meet the needs of homebuyers. The lack of housing inventory is directly proportional to the increasing difficulties of investing in real estate. However, with the implementation of robust construction activity to meet the needs of increasing business and population growth, we may see an upturn in supply. Again, emphasizing to homebuyers the need to work with real estate and property management experts that fully understand the market and can help investors make the best investing decisions to meet their financial goals.

The Triumph of Single-Family Homes

As the COVID-19 pandemic has compelled people to stay within their four walls, people prefer single-family homes over condos and apartments, as the former is more spacious and offers a higher comfort factor. Thus, single-family home renting and buying is expected to see a growth of up to 9% this year.

In addition to the relatively larger size of single-family homes, their affordability makes them more desirable among home buyers. The housing affordability index (HAI) of a market equates the median family income with the price of an existing single-family home, limiting their purchasing power to a single-family home.

Forbes revealed that millennials are the pioneers of this move towards single-family homes. As the cost of homeownership continues to rise, these residents, with a meager salary in their hands, prefer living particularly in single-family rental homes.

Smart Investing

Despite difficulties ahead for the Austin housing market, the fact remains that housing demand will continue to increase – affirming that real estate investors must be even more proactive and resourceful with their
investment decisions.

1836 Property Management is Austin’s leading property management company, helping investors easily move through the process of owning a rental property, yet with a focus on their long-term financial goals. Partnering with the right real estate team, from your trusted buying agent to an experienced professional property manager has never been more important. 

Interested in getting a FREE performance analysis of your current real estate investment? Simply fill out this form with your property data, and one of our Senior Property Managers will get in touch with you to deliver the insights!


By: Kayla Gonzales, 1836PM Marketing Manager

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