Deals, Dollars and Decacorns: What’s Happening in the Austin Real Estate Market?
Austin, Texas attracts venture capitalists, tech giants, and a slew of professionals from different US cities. This is pushing the demand for commercial and residential real estate in Austin.
In early 2021, the Austin Chambers of Commerce released a report stating that the city had lost 33,400 jobs in 2020 as a result of the pandemic.
The situation was pretty much the same everywhere you looked. Jobs were being lost, businesses were closing, and government shutdowns were the norm. There was widespread economic desperation.
Where Austin has done better than other metro cities is in getting those jobs and opportunities back and softening the blow.
A slew of business-friendly policies, an enviable (affordable) housing market, and a steady influx of tech companies as well as jobs have contributed to Austin’s recovery.
Empty commercial spaces and shuttered restaurants have given way to bustling offices and cheerful cafes in Austin, Texas. The turnaround has been so significant that, according to the National Realtors Association, Austin is currently the hottest real estate market in the United States!
Millennials, Tech Giants, and Investors: The Golden Trio Driving Austin’s Real Estate
Cushman & Wakefield (real estate, insurance, pension funds) boss Mike McDonald spoke to The New York Times and said the influx of millennials into the Sunbelt City was the most critical factor in fueling the Austin growth.
Millennials tired of hustle and bustle (mostly in New York and Silicon Valley) wanted to move somewhere very laid back and relaxed. They were looking for affordable housing options, low personal income taxes and a better standard of living.
Once working professionals (millennials) started moving to Austin, it was natural for businesses to start operations. This was followed by institutional investors who followed companies.
The COVID-19 pandemic has been both physically and emotionally difficult for millennials. They have struggled economically and watched loved ones pass away. It made everyone realize that they needed to take a step back and spend time on the things that matter. This is what has forced thousands of millennials to migrate from New York, California and other centers to Austin and other cities in the Sunbelt region.
- Tech giants and companies
Texas has always been a business-friendly state. This was demonstrated in its policies which promoted the ease of doing business. In 2021, the state announced incentives worth more than $19 billion for businesses in the state. With hassle-free paperwork, availability of real estate, and no regulations, you were looking at a shopping paradise. Everyone from Elon Musk to Larry Ellison decided to move their base to Silicon Hills from the Valley.
Brayer Capital, Next Stone Ventures, 8VC, and Bedrock Capital are just a few of the venture capital firms that have pooled more than $5.5 billion in 2021 alone. That’s thanks to a surge and an entrepreneurial spirit found in the capital of Texas. It is also supported by the arrival of brilliant and competent entrepreneurs from Silicon Valley who have set up shop in Austin. Investors are more than ready to support these entrepreneurs and their innovative ideas.
To explore the best of what the Austin real estate market has to offer, please visit- https://www.teifkererealestate.com/
The Austin Real Estate Market: Trends and Outlook
“Austin is going to be the biggest boomtown America has seen in 50 years” – Elon Musk.
To be fair, Austin, TX has been making headlines since about the second half of 1990 thanks to its business-friendly policies. The state has always attracted business with its fewer tax policies and other incentives.
In the aftermath of the coronavirus pandemic, Austin witnessed something quite unique that influenced its real estate market. The city has seen an influx of pandemic-worn professionals like no other part of the country.
You’ve had huge tech companies like Samsung and Oracle re-basing. You also had physically weary and mentally drained tech professionals working 16 hour shifts looking for a break and more importantly a better quality of life!
In Yahoo Finance’s 2021 Housing Market Survey, Austin tipped every other major city, including Los Angeles, New York and San Francisco. Let’s take a look at some important facts and figures about the Austin real estate market –
- In a report released by the National Association of Realtors, home prices rose 16% from 2020 to 2021 in Austin. It is one of the highest in the country.
- Single-family homes and their median prices rose more than 33% to nearly $500,000 in the last quarter of 2021 in Austin.
- The listing price of a home according to NerdWallet is up 29% in Austin from the same price a year ago.
- 54% of people looking to buy homes in Austin were not from the city or state. 46% belonged to different US states and cities.
- Homes for sale in the third quarter of 2021 rose more than 73% as home sellers wanted to take advantage of the strong growth and prices.
- In the last quarter of 2021, homes in Austin were only listed 22 to 24 days before they were bought. If you compare the same with the US average, it’s 40 days.
- Of all of Austin’s neighborhoods, Tarrytown is the most expensive with a median home price just north of $2 million. The West University area is the most affordable.
- The average rent has increased by more than 20% on an annual basis from 2020 to 2021. The rent for a three-bedroom property has increased by 27% in a single year.
- According to a Kiplinger report, home prices in Austin have risen more than 95% since the last housing market boom in 2006.
- US News voted Austin as the number one place to live in the United States in 2019. This was based on affordability, job opportunities, and standard of living.
The last takeaway
Almost predictable markers, trends and insights suggest that Austin will continue to be the fastest growing US real estate market for at least the next few years. With an incredible culture, rich history, active lifestyle, and relatively laid-back vibe, Austin has become a top destination for tech companies, professionals, students, and investors. As Austin’s unofficial ambassador for many years, the great Matthew McConaughey once said, “I was just waiting for the secret to come out.”