Why are prices in Round Rock, TX not going up as much?

Question

I’ve been in Austin, TX for 5 years now. Everything around Austin has increased in values. Why is Round Rock not appreciating as fast as other parts of Austin, Leander, etc? Is there something I am missing? As far as I understand, the schools are great, lots of employers, etc. There are tons of properties for $250K - SFRs 3/2. Rents for $1,700-$1,800. Why no love for Round Rock?

Mike Solak · Answer

tl;dr: Leander is a richer and smaller community with more room for growth. Yet, according to google the commute into Austin will be longer 20 minutes longer. The southern end of Austin poses future potential.

Good question! I just moved to Georgetown, TX, which is just north of Round Rock. I'm looking to house hack a residential home in the next couple months with my VA loan. Related to your question, I've heard that there is more focus on growing the southern end of Austin.

I looked at data on datausa.io, which a fantastic website, and there are plenty reasons why a property in Leander would appreciate more than Round Rock.

Round Rock vs Leander:

- Population: 116,369 vs 40,338

- Population growth: 3.19% vs 11.4%

- Median Household Income: 76,295 vs 89,649

- Median Household Income Growth: 2.98% vs 7.3%

- Number of Employees: 60,906 vs 21,037

- Number of Employees growth:  4.35% vs 16.7%

- Poverty Rate:  8.2%  vs 4.24%

- Leander is closer to Balcones Canyonlands National Wildlife Refuge

Williamson County (northern) vs Hays County (southern):

Williamson County seems to have a higher income, but Hays County has a higher margin of error.  With a lower population, there might be more room for development.

- WIlliamson County seems to have a higher median income, but lower margin of error.

https://datausa.io/profile/geo/austin-round-rock-san-marcos-tx-metro-area#economy

Hays County has plenty room for population expansion:

Hays County at 194,843 vs Williamson County at 566,719.

Are you an investor in Round Rock?  If so, do you find 250k to be a good deal?  I'm probably going to pickup a SFH for ~200k in Georgetown and house hack that.  Considering that most Austin properties break the 1% rule, are you doing the BRRRR method?

Poem Turner · Answer

@Mike Sola Love your research, I also use that site, and it's great for raw numbers. As you understand the communities better you'll see some interesting underlying concepts though. Round Rock has it's own economy due to Dell, Samsung, and a number of tourism opportunities: Dell Diamond, soon-to-be Kalahari (largest indoor water park and convention center in the US), sports complex). Leander does not necessarily have their own, but relies extensively on Austin.

As far as growth and appreciation, it's easier to look like there's a boom when there wasn't much there before (Leander). The sales data I have via title companies reflects similar rates of appreciation in both areas.

Bryan Noth · Answer

@Mike Sola nice data points for Leander vs Round Rock.  I do believe Round Rock's potential depends strongly on the location within Round Rock.  If you go to the outskirts the home prices are quite appealing as @Darshil Parikh pointed out in the first post.  If you stay inward, especially in those planned communities the home prices are appreciating steadily and have been high on the growth charts for the last 2 years.

@Mike Sola the second part you mentioned was the comparison of Hays to Williamson County.  Hays County is significantly smaller in size and population.  Hays County also includes Buda and Kyle which throws the data set off a bit for median values.  Hays County holds a lot of large acreage plats on the western side.  The new construction development sites in western Hays County are at or above Austin proper median home value and the school system there creates a strong draw.

And @Adam McQuiston 2010-2017 saw an average of 152 new Austin residents per day (roughly 55,000 per year averaged).  2019 growth projections were on par to hit 167 new residents per day (roughly 61,000 per year).  Those numbers equate to a population growth of 2.6% to 2.75% and coupled with job growth of 3.5% in 2019.   And the 2020 development announcements are not any less impressive.

Darshil Parikh · Answer

@Mike Sola your analysis is amazing, I am going to look deeper into Leander. With Indigo Ridge development coming soon, there is a lot of potential. As a realtor, I am trying to find the pockets where my investors can see some returns and also helps me as an investor.

Jeremy VanDelinder · Answer

It would take a lot of data crunching to prove my hypothesis, but as I see it Round Rock had a fast “run up” of appreciation 5-10 years ago and it has plateaued a bit as some of the other areas in Williamson County have become the “flavor of the day” right now. I think over a couple decades or so it evens out. Again, I would have to have a lot of aggregate data to demonstrate that, but that’s what it looks like to me—Round Rock is just stabilizing

Erik W. · Answer

I don't know the answer to your question, but could this be an opportunity to buy now while things are still relatively cheap compared to other areas?  Can you get Realtor who has been around 20+ years and see if this is a "thing" in the area?  Perhaps other areas rise first, then this area follows 2-5 years later.

Darshil Parikh · Answer

@Mike Sola I understand your point about supply and demand. However, the population growth is off the roof. There are rumors of Amazon distribution center (North East) opening in next 2-3 years, Samsung plant being there, there is a lot of potential. Also, location, it’s 15 Miles to downtown and 20 mins to the airport.

Darshil Parikh · Answer

I am not doing house hacking, nor BRRRR. It’s a newish property - I am debating Leander Vs North East Austin. I can get new for $285k 2,000 + sq ft in North East. I get schools are not great but it’s 15 miles to DT. Leander would be same purchase price but 5-10 years old home. If I can break even for next 2-3 years, I think properties will appreciate. I’m not a speculative investor even though I kind of am with not much cash flow here, but I’m generally bullish on North East Bc of so much undeveloped land. Round Rock just made me think as there are plenty still available for $250K - and seems odd to me.

Adam McQuiston · Answer

Maybe not Round Rock but I just Left there. All around there near Georgetown is massive builds going on. I spent two weeks there looking at the homes. Thousands are being built not hundreds.140 people a day are moving to the area.

Darshil Parikh · Answer

@Adam McQuiston - No new construction inventory around. Check out the map. It is really odd to me. It’s a buy, hopefully, they will continue to stay low and we can pick up a few.

Why are prices in Round Rock, TX not going up as much?

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