Home construction on $300,000-and-higher priced homes in Austin has increased 93 percent in just the last year. Gray Buffington, President of Buffington Mortgage notes that “The cost of living plays into this somewhat. Over 60% of the median income can afford to buy housing in Austin so both living and working while owning a home in Austin and surrounding areas makes this a prime real estate target.” But that’s not the only reason Austin’s housing market continues to be hot, unlike the rest of the country. So if you think a $700,000 home is expensive, remember this: to someone coming from California, it’s a steal. And investors are flocking to Austin real estaste looking for the next “California Real Estate Investment Extravaganza” People will say, ‘How are they paying for their mortgages?’ They are paying cash because they are taking equity out of their previous home and buying here,” said Sprague. “Real Estate Investors are looking at Austin and going, ‘Where is the next California?’” Though homes priced at $300,000 are up, production of homes priced under $150,000 are down. A couple reasons are: rising interest rates and an increase in construction costs that make it difficult to build for that price.