From zero state income tax to wide open spaces perfect for building and expanding, there are 101 reasons why Texas has long been a magnet for a range of businesses.
But over the past year, we’re seeing this trend turn into a boom. Tech companies are taking a break from their traditional hubs en masse — and leaving high housing costs and high taxes behind. One of their preferred destinations? Austin, the Texas state capitol.
As tech companies migrate to the city, obviously so do their employees, and all of those employees need somewhere to live. That’s great news for real estate investors in Austin.
Read on to learn why you should pay attention to the Austin tech boom and optimize your investment opportunities.
Why Austin is Known as Silicon Hills
Forget Silicon Valley. Savvy tech companies are heading for the hills… the Silicon Hills, that is.
Texas has been a popular site for tech companies for years. Organizations such as Apple, Dell, Facebook, Google, Space X, and IBM already have a presence in the state. This year, CBRE and Hewlett Packard Enterprise have all either moved their headquarters to the Lone Star state or announced that they will. These migrations have prompted Governor Greg Abbott to describe the trend as a “tidal wave”.
For many companies, Austin is the Texas destination of choice. In late 2020, computer technology company Oracle announced that it would expand its Austin campus to include company headquarters. Over the summer, electric auto manufacturer Tesla released plans to develop an Austin site that has potential to hire more than 5,000 employees. The CEO of Dropbox, a cloud storage company currently based in Silicon Valley, has also announced plans to head for the hills in 2021.
But why is this influx of tech companies such great news for real estate investors?
Austin TX Real Estate Boom
According to RedFin, Austin has the fourth-highest inflow of all U.S. metro areas. Significantly, a whopping 39.5 percent of searches for homes for sale in Austin are coming from outside the city.
Further, Austin real estate market statistics show that demand is growing at the same time supply is dwindling. A snapshot of market conditions at the end of 2020 reveals that:
- Active days on the market continue to drop
- Median home prices are up 19 percent year over year
- The number of active listings has decreased by 55 percent
In combination with a booming job market, Texas’s business-friendly environment, and low year-over-year job loss numbers, it’s easy to see why now is a great time to invest in Austin real estate.
Real estate investors are reacting to the boom by renovating key areas like kitchens and cooling systems. There has also been a big increase in artificial turf in Austin because of the quick installment and low maintenance it provides. These improvements make homes more robust for Austin’s natural climate and are attractive for potential buyers who are ready to purchase.
Austin Home Prices on the Rise
At the end of 2020, home prices continue to rise. In addition, residential property sales grew by almost 23 percent. Pending sales outpace new listings by 10 percent, according to Housing Wire.
Another factor to consider? The effects of the COVID-19 pandemic. Since the pandemic began in March, more employers than ever before have embraced remote work.
That means employees have greater choice as to where they call home. For many, it simply makes sense to work in an emerging tech industry hub while avoiding the astronomical costs of living in hubs like Palo Alto or San Francisco.
Looking ahead, the Austin boom seems poised to continue its upward trajectory for the foreseeable future. As home inventory keeps declining and demand for homes keeps growing, property values are likely to continue increasing.
All this means that now is a great time to invest in Austin real estate. But in times of high demand and low inventory, finding the right investment properties can pose a challenge.
Fortunately, New Western is here to help. We’ll work with you to find off-market investment properties that fit into your portfolio. Contact New Western today to learn how our team can connect you with exclusive off-market investment properties.
