Austin, Texas, fell from the No. 1 spot in 2021 to a predicted No. 10 in 2022 on Zillow's list of hottest housing markets in America. Tampa, Florida, has assumed the top spot, but Austin is still a very robust market.
The capital region of the Lone Star State has seen explosive population growth, the most of any large metro area in the United States from 2010-2020, according to the U.S. Census, swelling by a third in 10 years to nearly 1 million in the city itself and about 2.3 million in the metro area.
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Strong demand is expected to continue, driven by many of the same factors sparking residential real estate booms across much of the Sun Belt. Besides lifestyle factors -- Austin has long been a music and cultural magnet -- employment is booming there.
Big business is a big reason for the explosive growth, of course. Dell Technologies was created and is still based here, and the list of such major players is now growing fast. That includes Tesla headquarters and a manufacturing plant, along with Elon Musk's Space X. Oracle also is moving its headquarters there. Apple, Meta Platforms, and Alphabet/Google have a major, growing presence here too. And just in November, Samsung announced plans to build a chip-making plant in nearby Taylor, Texas.
It's not just big, publicly traded companies, either. There's state government and the University of Texas, plus a burgeoning community of digital start-ups and maturing fintechs that add to the heft. And the biggest private employers? Grocery chain H-E-B, with about 19,000 Austin-area employees leads the list, followed by healthcare system Ascension Seton and Walmart at about 15,000 each, Dell at 13,000, and Amazon at 11,000, with a massive new distribution center under construction that will add more.
We're talking tens of billions of dollars in new investment in all kinds of real estate, as well as tens of thousands of new jobs pouring into a region where the population is predicted by some to double in the next couple of decades. That, too, will add to the demand for housing, of course.
So, how is a place like this a homebuyer's dream? Let's count the ways.
1. It's still a relatively good deal
The typical value of a home in the core of the Austin market itself rose a staggering 39.4% in 2021 to $612,645, Zillow says. Meanwhile, Redfin says that in December 2021, homes here sold for a median price of $570,000, up 19.5% from December 2021. Compare that to a typical value of $1.3 million that Zillow pegs for a home in San Jose, California, and you can see why thousands of highly paid existing and future employees of those big tech firms are making the move.
2. A growing market can sustain a long-term investment
That surge of business investment, as well as the population surge that's accompanying it, means an investment in a home here continues to look a good strategy for building long-term wealth. That part of the American dream continues to look achievable here, even with such escalating prices.
The market itself is expanding, especially southwest and north of the city, providing opportunities for less expensive homes that could see significant value escalation in the years ahead. And inventory is growing, taking some pressure off price hikes overall, and those smaller cities outside the core market look especially attractive, according to real estate agents cited in a recent Axios article.
3. People want to live there for lifestyle reasons, too
Austin has a great reputation as a place to visit and live. It has a legendary music scene that's still very much alive in the 6th Street District, the massive South by Southwest festival and conference that should bounce back when the pandemic mercifully fades, the attractions and stability of being a major university and state capital, and the vibrancy that comes with being a growing, optimistic area.
The young folk seem to agree. The median age of the Austin metro is 34.9 years, compared to 38.2 years nationally.
A great place to live is an investor's dream, especially if that's your home, too
Generally, those attributes that to many make Austin a great place to live make it a great place to invest in a home, too. Altogether, signs point to optimism for many a homebuyer's dreams to come true here deep in the heart of Texas.
