Migration to cities like Austin and San Antonio during the pandemic has caused prices to escalate.
During the pandemic, a wave of US residents migrated to Southern states in search of more space and a lower cost of living. As a result, higher housing costs are pricing people out of places like Texas.
Fed up with California’s soaring home prices, a whopping 111,000 people made the move from the Golden State to Texas in 2021, making it the most popular relocation route in the country. From a state-by-state standpoint, Texas racked up 9,085,073 new residents between 2000 and 2022, the biggest gain in the nation. As a result, home values in certain Texas cities have risen dramatically in recent years.
“Austin became extremely expensive during the pandemic, and San Antonio has experienced spillover migration as a result,” Daryl Fairweather, chief economist for Redfin, told The Wall Street Journal.
Once praised for its low cost of living, San Antonio’s affordability started slipping around three years ago. The home prices spiked in part due to high labor costs and a rise in home-building materials caused by pandemic-related supply chain disruptions. However, the influx of newcomers and an overall inventory shortage had a major role.
“A lot of people were getting priced out of Austin and started moving into San Antonio,” local real estate agent, Marie Crabb, told the WSJ. “They were getting priced out, according to them, by people from California. It was an interesting trickle-down effect.” Of course, Texas still remains one of the more affordable states compared to places like California, where the median listing price in September was $379,900 and $760,000, respectively.
While prices haven’t quite returned to their pre-pandemic levels, the housing market in popular cities like Austin is starting to cool. According to a report by Realtor.com, the median listing home price in August 2023 saw a 2 percent year-over-year drop. While that number sounds small, it’s good news for prospective buyers.
