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ustin's real estate market is expected to remain hot in 2025, with industrial and housing units driving growth, according to Urban Land Institute Austin's monthly breakfast panel. The city's office market, however, faces a slowdown due to high vacancy rates and hybrid work patterns.

    The Emerging Trends in Real Estate 2025 report highlights Austin's growing tech economy and logistics hub status as key drivers of development. Industrial transaction volumes for 2024 year-to-date are $872 million, indicating sustained investment in this sector.

    Housing remains a concern, with the city's supply not keeping pace with population growth. The completions-to-household formation ratio is below the national benchmark, signaling an undersupply that drives up costs and median home prices relative to incomes.

    Sergio Negrete, vice president of development for Catellus, notes strong interest from residential builders due to the market's supply-demand imbalance. He expects continued growth in master-planned communities and retail developments in surrounding areas like Round Rock and Georgetown.

    The office market faces challenges, with high vacancy rates and uneven demand. Multifamily real estate continues to attract investor interest, but concerns over pricing and oversupply temper expectations.

    Darlene Louk, director for Hines development company, emphasizes the need for Austin to balance growth with long-term affordability and infrastructure needs. The city must increase its housing pace by 40% to meet expected population growth, which is currently struggling to keep up with demand due to a lack of available land for new developments.