Austin, Texas Market Overview
Observations Made
Growing up in central Texas, commuting to the next sports practice somewhere between Austin & San Antonio, and seeing agricultural fields turn into real estate structures was a common view from the minivan.
When I first moved to Austin proper seven years ago a similar trend related more to commute times could be seen.
A simple commute from Congress & Stassney to Sixth & Congress went from 15 minutes to 45 minutes in just two years time.
Other signs of growth can be observed - such as lines around venues getting longer, and waits at staple restaurants commonly over an hour and a half.
If You Build It
The state of Texas as a whole has been advocating out of state employers to set up shop in Texas for quite some time. Enticing these employers with tax related incentives the fruits of their labor have come to fruition.
Big time employers such as IBM, Amazon, and Apple have all planted sturdy economic roots; subsequently people are moving here in droves and taking full advantage of what the city has to offer.
This includes the nations #1 economy, according to POLICOM, who ranked Austin #1 in back to back years and not outside to the top 3 over the last 5 years. (6)
This economy is being supplemented by a steady stream of competitive labor as well.
In fact, Austin is considered one of the fastest growing cities adding 440,000+ residents since 2010; and one of only four U.S. metro areas to report greater than 25% population growth over the last eight years. (5)
Other sources consider Austin THE fastest growing city between 2011 - 2016 with expected economic growth rate of 6% and a population growth rate of near 3%. (2)
Either way you look at it, people are picking up and moving to Austin at a fast pace.
Why is there a need renovated homes?
People are moving here so quickly that within Travis county there is only 2.3 months of inventory. According to Sapling, between zero and four months of inventory represents a sellers market and gives sellers more control over price setting and terms. (7) (4)
In addition to seller control, 2.3 months of inventory opens up the market for flippers to come in and offer the closest thing to new, and for buy and hold investors to fill their houses with tenants.
This supply trend is not expected to change according to Norada Real Estate, who also predicts home prices will increase 4% - 6%. (8)
This low supply also leads to high appreciation rates in the market. In the last decade, the Austin housing market has appreciated a whopping 74.80%, one of the highest rates in the US during that time. (3)
In addition to these excellent economic metrics, the 2.7% unemployment rate - which is 1.2% less than the national average - and expected job growth of 47% trumps the national average of 33.5%. (3)
Okay, So Where Are We Headed?
Where the market heads is heavily dependent on who is buying houses in Austin.
The median age of the 722,492 individuals in Austin is 32.7 with the largest portion of the population falling in the 25 - 30 year old range followed by the 30 - 35 year old range. (2)
These age ranges are all within the Millennial generation, who accounted for the largest buying force in 2018. This trend is expected to continue, especially in areas close to neighborhood amenities and close by shopping/socializing spots. (8)
Market Outlook
The short-term real estate forecast in Austin is positive, per LittleBigHomes.com who boasts a market trend prediction of 85%. (9)
This same source sees a high probability that home prices will increase over the next three years ending in the 3rd Quarter of 2021.
With massive scarcity in home supply continuing and an influx of large employers drawing in a Millennial workforce, Austin leverages a great real estate market to invest in.
References:
(1)https://www.forbes.com/pictures/mlj45hfdf/1-austin-texas/#d626a0056d01
(2)http://worldpopulationreview.com/us-cities/austin-population/
(3)https://www.mashvisor.com/blog/austin-housing-market-2019/
(4)https://www.abor.com/statsmay19/
(5)https://www.usatoday.com/story/money/2019/05/09/americas-fastest-growing-cities/39442201/
(6)https://policom.com/rankings-metropolitan-areas/
(7)https://www.sapling.com/6464819/calculate-months-inventory
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