More Austin homes were sold in 2021 than ever before, and that trend is continuing into 2022. The real estate market is fierce and competitive, with prices for houses rising more and more. And there are tons of reasons behind the sudden change in the area's housing market.
For example, Austin real estate market trends show many people are moving to the city for work. It has a variety of jobs, and people believe the city is a good place to advance their careers. There is also a diverse population that gets bigger day by day.
To learn more about the trends affecting housing in Austin, keep reading below!
Austin Is One of the Fastest Growing U.S. Metros
There was a time when Austin was a small dot on the map of Texas. When people thought of big cities in the state, they would think of Houston. But now, Austin is seeing one of the biggest population booms in the U.S.
The population increased to around 2.3 million people in May 2021, and that number has only gotten bigger. Where there are people, there is value, and people naturally want their homes to be valuable. It's an exponential cycle where the more people buy homes, the more valuable they become.
There are tons of reasons people would want to live in Austin besides sudden explosion of value, too. The climate is unlike most other places in the U.S., attracting people who want a warmer and brighter place to live. It is also right next to a diverse set of industries, ranging from media productions to tech.
More People Are Relocating From Other Cities
Most people who move to Austin are from other major cities like San Francisco and New York. There are many theories about why people would suddenly want to leave these cities. Most of them tie into the COVID-19 pandemic.
A lot of people may think that their cities mishandled the pandemic response and are moving to places that more closely align with their political views. Texas is a beacon for these kinds of people. And Austin is even more aligned with what they want from a community.
The city offers many amenities like resorts, parks, and municipal squares. It offers an urban lifestyle like people in San Francisco and New York are used to, but at a rural price — at least for now.
Austin Real Estate Is Valuable Because of Job Proximity
One of the reasons Austin real estate is so hot is because of how close it is to a diverse range of jobs. The city has jobs in media studios like Rooster Teeth, while also offering broader tech jobs in blue-chip companies. There is also a significant industrial and manufacturing presence around the city.
People aren't just heading to the city to avoid the cities they're coming from. They also want to chase their dreams in a place that has opportunities for them to grow. People who move to Austin believe the city offers a unique chance for them to grow their careers and succeed in new ways.
By the end of 2021, the city actually ranked as the second-best performing job market in the country. Its labor market has fully recovered from the COVID-19 pandemic and has even started adding new jobs to the list. The city also offers special deals for companies interested in moving to Austin, such as tax incentives for moving into vacant lots.
The City Has a Variety of Industries and Diverse People
With so much business being conducted in the city, residents are bound to meet a range of different characters. Fewer than half of all residents are White, with significant populations of Latinx and Black people. Residents can find a place where they feel at home regardless of their heritage in Austin.
And the city is only growing more diverse as different businesses move into the area, bringing with them new workers.
Investors Are Targeting Austin
Investors are driving a significant part of Austin's growth, buying and remodeling old houses and buildings. They see how quickly the city has grown and want to share in the profit. And the more that they invest in the city, the more it is bound to grow.
With such a quickly growing population, occupancy rates are sky-high. Investors will have no problem finding a business or family to move into their home. They will even be able to create competition between buyers, raising the price of the property with each bid.
A large portion of the residents are also moving to Austin for a long amount of time. As new businesses are built in the city and the homes are sold quicker, people will settle down. They will build careers out of the city, creating connections with others that will keep them in the area.
That means investors will be able to continue making money for a long time, before having to worry about people leaving Austin. It also means buying real estate in Austin is harder for average people.
Most Investment Properties Are Rentals
Most of the properties bought by investors are rentals, with rent prices in the thousands of dollars. A year-long lease can be enough to cover around half of the upfront cost of investing in a house at the current prices. At $1,700 per month, investors can make more than $30,000 per year off just one house.
They stand to profit a lot more by investing in several homes at once. Plus, anyone with a good credit score and enough capital can become an investor. They can get started here, taking the first steps towards building an Austin real estate empire.
If you're wondering, "Should I invest in Austin real estate," the answer can't be more obvious — yes.
Rising Prices, Falling Inventories — Like Everywhere Else
Austin is not the only city that is seeing a booming real estate market. Across the U.S. small cities are dealing with rising prices of homes, while inventories of houses on the market fall. The result is an ever-increasing competitive cycle between buyers.
Anyone interested in buying a house needs to compete with many others looking for the same thing. The process is also self-reinforcing. Fewer homeowners are willing to put homes up for sale out of fear they won't be able to find another place to move to.
As a result, the market continues to have low inventory with higher demands, continually pushing the price higher. It's a trend seen in Knoxville, Tampa, Denver, and beyond.
Austin Real Estate Market Trends Show It's Time to Invest
All Austin real estate market trends point to one thing — now is the time to invest. Prices are only going to keep getting higher, and there can only be so many houses on the market. If you don't invest now, there is a good chance it'll become too expensive later on.
Finding an investment property, or a first home, is still possible in the housing market, though. You just need to do research. And to learn more about the housing market, just keep reading our website.