The housing market in Austin, Texas could not be hotter right now. Spurred by a booming economy and new residents arriving in droves, the area’s real estate market is seeing unprecedented appreciation that makes the Texas capital a great place for investment opportunity, especially for multifamily housing investors.
With an overall rank of No. 2 on WalletHub’s Best Places to Buy a House list, Austin also lands in the No. 1 spot of large cities with hot real estate markets. Part of that ranking is due to the demand that’s been rising for years. Between 2010 and 2020, the population of Austin grew by 28 percent, from 790,000 residents to just over one million today. According to a report by The Urban Institute, the population of Austin could reach 3.2 million by 2030. Austin sits in Travis County, which is also welcoming plenty of new residents. The county population of 1.3 million has been seeing year over year growth of 2.15% for the past three years in a row.
A lot of Austin’s new residents have been attracted by its culture and job market. Amongst Austin’s major employers are tech giants Facebook, Apple, Amazon, eBay, and Google. Other major employers include Charles Schwab, the University of Texas, and Austin’s largest employer, 3M. In addition to its business climate, Austin has been able to lure new residents because there is no shortage of fun things to do in Austin. The city is a major music destination, with countless live music venues, and is also home to the massively popular South by Southwest conference, an annual event which brings together leaders in tech, music, and the film industries. As if all of that weren’t enough, Texas offers the friendliest of advantages to its residents: Texas doesn’t have a state income tax.
Housing Scarcity
With its seemingly endless stream of new residents, Austin is facing a housing shortage that has caused prices to surge. Currently, the median home value for greater Austin is $482,000, which is an all-time record. The median home price for the city of Austin was also at an all-time high at $575,000. With so much inventory having been sold in 2020, total homes for sale on the market dropped 56% year over year. In July of 2021, homes in Austin were on the market for an average of 13 days. Currently, there is only about 18 days’ worth of inventory.
Due to that competition for housing, a lot of would-be homeowners are renting while they cool their heels until they are able to buy. The demand for rental housing has led to an increase in rents in the area, with rents in Austin averaging $1,442 a month in July of 2021, up from $1,278 in July 2020. For investors in the multifamily housing sector, this housing shortage means that there is going to be a large and consistent base of renters for the foreseeable future. If you’re looking for a place to invest, Austin is hard to beat.
