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Austin's booming housing market is redefining what counts as 'luxury' real estate

One million dollars used to be a benchmark for "luxury real estate." But that's not necessarily the case anymore.

AUSTIN, Texas — We've all seen the headlines: Austin's real estate market is booming. 

The median price for a home in the Austin-Round Rock area is currently $480,000. Four years ago, it was $301,000. That's a 59% increase in less than five years.

And the shifting real estate market is changing which properties are considered "luxury real estate."

In Austin, a $1 million price tag used to be the benchmark for a luxury property. But now $1 million could buy you a townhome near downtown or a teardown in other parts of town.

"I remember when having a $900,000 listing, everybody was like, 'Whoa, she is a really big listing.' And now, you know, that, that – you can get that in just the regular, nonluxury neighborhood. It's incredible," said Socar Chatmon Thomas, a realtor with Elegant Estates by Auction.

Chatmon Thomas has been selling real estate for 26 years. She said what sold for $1 million years ago could easily sell for $2 million to $2.5 million today.

What was once considered luxury is now common, and it's turning Austin into one of the most expensive real estate markets in the country.

And those in a position to buy aren't the only ones feeling the pinch – renters are, too. 

Despite the fact that there are more apartments under construction all over the city, demand for rental units remains high. The Texas Real Estate Research Center at Texas A&M University found rents in the Austin area are up more than any of the other major metropolitan areas in Texas, up on average 13.5% and up to 16.8% among the newer apartments.

And with the latest property tax bills, many say landlords will have no choice but to pass on the costs to renters.

WATCH: Luxury home sales booming in Austin area

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