The residential real estate market in Austin, Texas has been soaring for years now, and there’s no mystery as to why. Big companies, good jobs, and a crackling tech industry attract upwardly mobile residents from across the country. By “upwardly mobile,” I’m mostly referring to employable folks who plan on buying a house in the near future — or immediately upon arrival.
All of this bodes well for the Austin real estate market in 2015. In fact, this Central Texas housing market has seen some of the biggest home-price gains of any non-coastal metro area in the U.S. According to CoreLogic, a real estate data and analytics firm, home prices in the Austin metro area rose by 8.6% during 2014.
‘Big Tech’ Contributes to Big Gains in Austin Housing Market
Austin’s economy is thriving across the board, with an unemployment rate in the low 3% range. But the tech industry, in particular, contributes much to the strength of the Austin housing market.
This has long been the case. Dell has called this city home since the 1990s, along with several other Big Tech companies. These companies make up the bulk of Austin’s economy and account for the lion’s share of jobs in the area. They also prop up property values and put thousands of people in the position to buy a house, much to the delight of local real estate agents and home builders.
The Austin Technology Council, which promotes the advancement and growth of tech companies, estimates that the area could gain another 9,000 new tech jobs by 2017. Last year, the city was ranked #2 on a Forbes list of “Best U.S. Cities for Future Job Growth.”
Real Estate Prices Rise on Strong Demand
Each month, Realtor.com publishes a housing summary with data and rankings for 200 or so metropolitan areas across the U.S. According to their latest report, the median list price for Austin homes rose 21.2% over the last year or so. That put Austin among the top-ten metro areas for annual list-price increases, out of 200 metros nationwide.
Realtor.com also reports a 17% decrease in total listing volume (the number of homes listed for sale on their website) over the last year. This means Austin home buyers are competing for fewer properties today, when compared to a year ago.
Population growth and high employment have increased demand for housing, at a time when inventory has remained steady and even contracted in some parts of the metro area. Home prices tend to rise under such conditions. And that’s exactly what we have seen over the last couple of years.
Longtime Residents Still Remember the Dot-Com Crash
Of course, it wasn’t always smooth sailing within the Austin tech industry. This city was hit hard by the tech crash of 2000 – 2001. Some companies disappeared entirely, while others laid off workers in droves. The job market contracted. It was nothing like the Great Recession that came a few years later, but it wasn’t pretty.
Some economists and analysts say that this time is different. Austin is still widely regarded as the Silicon Valley of the central U.S. But the world has changed since the initial Dot-com bubble. Technology is more prevalent in our lives these days. Also, the big tech companies seem to have figured out how to go the distance, in terms of growth and sustainability.
No one can predict the future. But for now, and for the foreseeable future, Austin’s real estate market is getting a nice boost from its bustling tech industry.