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Almost anyone in the housing world will tell you we\u2019re missing millions of homes, and the only way to keep prices and rents from soaring is to build.\u00a0<\/p>\n
Austin is doing that.\u00a0<\/p>\n
The median asking rent, or the initial rent amount that a landlord requests for a property, plummeted almost 18% in Austin last month compared to a year earlier, according to<\/a> Redfin. In its analysis, Redfin said it was the greatest decline of any metropolitan area it looked at.\u00a0<\/p>\n \u201cAuthorities in the Texas capital signed off on the most new construction in the country in an effort to keep up with soaring demand during the pandemic,\u201d the analysis read. \u201cDemand has now leveled off, but a lot of new apartments are still coming onto the market, so asking rents are falling.\u201d<\/p>\n All the while, the country\u2019s median asking rent rose, albeit by less than 1%. But after the last few years, when rents rose considerably during the pandemic, a boom in construction flatlined rents\u2014and in some parts of the country pushed them down.\u00a0<\/p>\n \u201cAlmost everything in our lives costs more than it did two years ago\u2014but rents have remained largely stable thanks to the construction boom, especially across the Sunbelt states,\u201d said Redfin senior economist Sheharyar Bokhari. \u201cWe are seeing rents tick up a little now that new construction is starting to slow down, but asking rents are likely to stay relatively flat for some time due to the backlog of new apartments that are still coming onto the market.\u201d\u00a0<\/p>\n Because construction is so prominent in the Sunbelt due to lighter regulation<\/a>, Austin wasn\u2019t the only boomtown to see its rents fall by double digits. In Jacksonville, Fla., the median asking rent dropped 13% in August from a year before. In Tampa, rents fell close to 6%, and in Dallas, they declined more than 3%. Not to mention, some of these same Florida and Texas boomtowns are awash in a glut of condos<\/a>, which means even more supply.\u00a0<\/p>\n Either way, we know in Austin it isn\u2019t only rents. Home prices in the city are down almost 5% over the past year, per<\/a> Zillow<\/a>. It\u2019s a stark change from a little more than two years ago when the average home value peaked in Austin. It seems building more homes is working, and it\u2019s great for typical Americans\u2014maybe not investors. <\/p>\n Either way, the trend might not last long.\u00a0<\/p>\n Capital Economics economist Thomas Ryan recently wrote<\/a>: \u201cThe Sunbelt will continue to attract strong economic immigration, so the current excess housing supply should quickly get absorbed. And with new construction already falling in the region, excess supply should be less of an issue down the line. Therefore, we expect house prices in the Sunbelt to recover. Indeed, in places like Austin, Dallas, and Jacksonville, it appears the worst is already over.\u201d<\/p>\n Even so, what housing policy analysts, urban economists, and the in the yes-in-my-backyard crew have been suggesting for decades\u2014that building more homes is the key to containing costs\u2014is finally catching on, and maybe Austin has something to do with that.\u00a0<\/p>\n It\u2019s no coincidence that Vice President Kamala Harris recently vowed<\/a> to end the country\u2019s housing crisis, or shortage, by the end of her first term if elected president; or that former President Barack Obama, at the Democratic National Convention, referring to her housing plan, said: \u201cShe knows for example that if we want to make it easier for young people to buy a home, we need to build more units\u2014and clear away some of the outdated laws and regulations that made it harder to build homes for working people in this country. That is a priority, and she\u2019s put out a bold new plan to do just that.\u201d<\/p>\n<\/div>\n