Just 10 years ago, a family could find a home in up-and-coming Hays County neighborhoods for less than $200,000 on average.
Cities such as San Marcos, Kyle and Buda along the bustling Interstate 35 corridor were an attractive option for many people who worked in the fast-growing metropolitan areas of Austin and San Antonio. Housing and rent prices were low when compared with their big-city neighbors, and it was easy to hop on the interstate and head north or south to and from work each day.
But now median home prices have jumped drastically in what has become the nation’s fastest-growing county with at least 100,000 people.
The median home sale price in Hays County has surged from $184,000 in April 2012 to $477,000 in April this year, according to national real estate brokerage Redfin. That’s a jump of nearly 160 percent over the last decade.
That means Hays County is moving further away from being a bedroom community for Austin and San Antonio and closer to being a mini-metropolis in its own right — with the housing prices to match, says Chance Sparks, a former city planner for Buda.
“You have this whole area from the south end of Comal County up to the north end of Hays that kind of has its own gravity now,” said Sparks, who’s currently manager of urban planning and design for the engineering firm Freese and Nichols. “There’s a lot of economic opportunity there, and several other issues are converging, which makes it a very popular place for people to move to.”
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Home prices in Hays County are far greater than in Bexar County, with median home prices of $477,000 and $311,000, respectively, according to Redfin.
But Hays County cities are still less expensive for homebuyers than Austin, where the median price was $623,000 in April.
For those who can’t or don’t want to buy a home, rental prices are increasing across the board as well.
Hays County — which is part of the Austin metro area, along with Bastrop, Caldwell, Travis and Williamson counties — has among the highest average rents in Texas for a two-bedroom apartment, at $1,451 per month, according to the U.S. Housing and Urban Development Department. Midland County is close behind, with an average rent of $1,433 for a two-bedroom unit.
Rents are so high in Hays County that they sometimes outpace even the metro areas.
“One of my friends works in Buda but lives in South Austin because the cheapest apartment he could find in Buda was $1,600 a month,” said Colin Strother, a political strategist and former Buda planning and zoning board chairman.
His friend pays $1,280 a month to live in Austin.
No slowdown expected
The high rents and home prices result partly from a shortage of available homes for the thousands of people who are moving to Hays County every year.
With four Amazon distribution centers, two outlet malls, a growing university and an increasingly large industrial footprint, Hays County is attracting more workers than it can house.
Even with developers coming to city councils in San Marcos, Buda, Kyle, Wimberley and Dripping Springs on a weekly basis seeking development permits and agreements, “it’s just not enough to keep up with the population growth,” Strother said.
“They are basically building multifamily homes as fast as they can build them,” he said. “And it still isn’t fast enough.”
The fast-paced growth, of course, comes with its own problems — including too many cars and trucks for the roads to handle, too many kids for the schools, too much demand for water and too much potential for pollution of the water supply.
But as long as housing demand in Hays keeps growing, the residential developers will keep coming — and they aren’t necessarily building houses for blue-collar workers, Strother said.
“It’s definitely a higher-income population” buying houses in the new developments, he said.
New homes often start in the $350,000-to-$400,000 price range, he said.
Pricing out people
The high prices are squeezing out many people and businesses that previously could afford to live and work in the county without a financial struggle.
Half Price Books has been in business on Bugg Lane in San Marcos since 2002, according to Julie Castro, the assistant district manager for the wallet-friendly book store, which is headquartered in Dallas.
But the store closed down early this month largely because it was priced out of its leased space and the company couldn’t find a reasonably priced alternative.
“Rent has been going up,” Castro said, and the bookseller couldn’t work out a more favorable lease agreement with the building owner.
“You can’t blame them — commerce is commerce,” she added. “But when it just gets to a point where rent is so high that you don’t have enough extra money for your employees, you have to cut your losses.”
Castro said Half Price Books might be able to open another San Marcos location “maybe when things calm down.”
But with Hays County’s growth continuing to outpace that of neighboring municipalities, few are expecting the market to calm any time soon.
Hannah Durrance, president of the HOME Center, a San Marcos nonprofit that assists homeless people in the area, said she’s seen an increase in elderly people over the past couple of years who can no longer afford to pay rent or stay in their homes.
“One of the ladies we’re working with was a woman who receives a Social Security check each month, and when the rent went up to over $1,000 a month” she couldn’t afford to live in her apartment anymore, Durrance said. “She’s living in her car now. Seventy-seven years old and can’t afford rent.”
There’s a four-year wait list for government-funded housing in San Marcos, and the city’s scant resources for people without homes are spread thin. At least 50 percent of the people who come to the HOME Center seeking help live on fixed incomes, receiving Social Security or disability checks, Durrance said.
With rent topping $1,000 for units that used to cost $750 or $800, more people are finding themselves out of options.
“We’re seeing more individuals who are unhoused, a lot more elderly people who are unhoused,” Durrance said. “We’re getting a lot more calls asking for help trying to find low-income housing.”
Future housing costs
Hays County’s torrid growth is showing no signs of cooling — which means houses will continue to sell at premium prices, barring any drastic change to the economy.
“In my career, I’ve only seen housing prices drop once, and that was in the Great Recession when the housing bubble popped” between 2008 and 2010, said Sparks, the former city planner for Buda. “If prices do drop again, it will likely imply some sort of economic recession.”
Employers such as Amazon, Tesla and Samsung have launched major operations in the Austin area or announced plans to do so. In other words, housing demand will only increase in Hays County.
The Hays County school district is bracing for more than 58,000 new homes to be built over the next 10 to 15 years. That will almost certainly mean a lot of new school construction in the years ahead.
Strother and Durrance say the county needs to focus on more affordable and low-income housing options for people who are being squeezed out of Hays’ market.
San Marcos and Hays County could “start working with developers and bring forward tax incentives that would allow for a certain number of Section 8 vouchers so there’s some competition” for building more government-funded housing, Durrance said.
“They could also provide more funds to the housing authority for building more apartment complexes,” she said. But not for more apartments for Texas State students, she added.
Strother said a “fear” of affordable housing among Hays County builders and government officials has exacerbated the county’s expensive housing market.
“To some extent, Hays County has done it to themselves because of the fear of low-income housing developments,” Strother said, adding that Buda has denied two such projects in the last 10 years. “There’s a stereotype around those that have been perpetrated.”
With blue-collar workers and their families increasing looking elsewhere for houses and apartments they can afford, Strother said, the growth-at-any-cost mentality of area developers and public officials could be coming back to haunt Hays County.
“There’s often this mindset in towns of all sizes that ‘we want to grow, growth is good,’” he said. “But not all growth is good.”
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