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Originally Posted by TraeSlab713
Why are Austin's home prices more expensive than San Antonio's? Is it because more of Austin's new homes sit on hills?
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I don't believe there is one single reason as to why it's more expensive to live in Austin than San Antonio. However, I believe demand is the key driver in the price of a home in Austin.
The city has doubled its population approximately every 20 years since its incorporation in 1839. In doing so, Austin is the only major city in Texas (and other than Las Vegas, may be the only major city in the U.S.) which can lay claim to this feat. And as we know, if demand increases, pricing is soon to follow.
The sizing of lots really has minimal bearing on the overall price of a home (obviously if you are not comparing a quarter-acre lot to a 5-acre lot). Plus, the average size of a single-family residential lot from city-to-city is pretty much the same across the U.S. (with the exceptions of urban centers like New York’s Manhattan Island, central Chicago, Miami Beach, etc.).
Construction costs could also be a plausible factor. But, they’re increasing in every city in the U.S. I’m not a construction expert, but I do know that for single-family residential construction in Austin, it’s very rare to have to blast rock for a particular home’s construction. About the only time you may find blasting or substantial removal of rock would be if someone was construction a cellar or in-ground pool. Also, in certain circumstances one might need to use a bit more concrete for a particular foundation, but, again, in the overall scheme of things, I do not believe that is what is causing the disparity we see in average and median home costs between Austin and other cities in Texas.
The increase in single-family home construction in the hills is also a likely factor to the rising prices of homes. However, San Antonio has hills as well.
Let’s remember, that the average and median home price in Texas is still cheaper than the U.S. average and median. Therefore, I believe it’s demand that is the key driver in home prices – at least around here…