Why is the Austin Real Estate Market Booming?

 
Austin has been a boom town for decades due to our robust job growth. As long as we can remember, Austin has been listed as one of the "Fastest Growing Cities in the US" (and is often listed as #1.) Our high quality of life, relatively low cost of living, educated job force, and "weirdness" all contribute to this. However, Post-COVID has seen an unprecedented boom. Why?

Continued Job Growth

Tesla, Apple, Google, Facebook, Indeed, & VRBO are all companies who have increased their presence in Austin dramatically in the recent past. These are also all highly recognizable companies. You probably haven't heard of QSAM Biosciences, Eleiko, Alpha Paw, Sentry Kiosk, Ametrine, 8VC, Truelytics, or Digital Realty Trust. These are only a few of the "other" major companies who have relocated their HQ to Austin very recently. https://www.bizjournals.com/austin/news/2021/02/08/these-headquarters-have-moved-to-austin-in-2021.html

Relative Affordability

Even though we're rapidly appreciating, Austin is still a relative bargain. It makes sense that we would be considerably cheaper than The Bay Area, Manhattan, or Seattle. The fact that we're considerably less expensive than Denver or Portland indicates that we have room to grow. More details are available here.
 

Historical Housing Shortage

Austin was already in a housing shortage before this recent boom. The broader market has consistently been in the <3 Months of Inventory range for 5+ years, which is considered a sellers market. We already needed to play catch up prior to the boom, and the inventory problem has only worsened after the boom.

Lower Tax Burden

Austin has a comparatively high tax rate, but Texas has no state income tax. Many tech heavy states (like California) have very high state income tax rates. When you compare the overall tax burden between Austin and these states, Austin wins by a decent margin.

Remote Workers

Due to COVID, many workers (and almost all tech workers) now work remotely, from home. Many tech companies have announced that this change will be indefinite and are allowing their employees to live anywhere in the US (or world) that they would like. These remote workers now place a high priority on physical space and are looking at less expensive markets where they can buy a larger home and still maintain a high quality of life. Austin tops many of their lists as an option. This demand is new and unexpected, and it was caused 100% by the changing dynamics caused by COVID.

Is Austin in a Bubble?

We don't think so. True bubbles are relatively rare in real estate markets. Beyond that, the buyers in Austin are largely owner-occupants with 20% or more down payment in their homes. These owners are unlikely to dump a property if there is a temporary flattening (or drop) in values. This boom is very different than 2007 (during which Austin fared incredibly well) and unlike any of the true bubble markets in Las Vegas, Phoenix, etc that did exist before the 2008 crash. More on this is available here.

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Andrew

My Realtor, Tyson Hombroek, was incredibly knowledgeable and professional. He helped me find the perfect new construction home for me, and he made sure to follow up with the builder consistently to keep them on track and get the job done right. Tyson helped me get through my first homebuying experience seamlessly and stress free. Tyson went above and beyond and I would 10/10 recommend him to anybody looking for the best homebuying experience.

Matthew H.

It was a pleasure working with Alex Ellis during our search for a lot in the Austin area. Alex was very knowledgeable of the Austin market and surrounding areas, and always quick to respond whenever we had any questions or concerns. Alex always kept our best interests in mind and helped the entire process go as smoothly as possible. I look forward to working with him for many years to come!

Skylar T.

I’ve worked with Jeremy Vandermause twice in the past 4 years and have had an excellent experience. Thoughtful, thorough, and truly takes your best interests to heart as he works FOR YOU. Strong recommendation for any type of buyer trying to wrap their head around the Austin market.

Customer S.

My experience with Jeremy Vandermause as my realtor has been a phenomenal experience. I’m extremely thankful that I got setup with someone who is passionate and truly cares about what you want in a home. He took a lot of the stress off of finding a new home, especially in an area that I am brand new to as I moved to the Austin area less than 6 months before purchasing this home. If you are looking for a new home or are a first time home buyer like myself, I definitely recommend Jeremy as he is knowledgeable in homes and in the areas he services while also being as particular as you are in finding the best deals on the market. He doesn’t waste your time with houses he knows you won’t like and digs until he finds something matching your criteria. He also helped me sell a home 6 months later, which was as smooth as purchasing. Thanks for everything Jeremy! It’s been a real pleasure working with you.

Jackie Murchison

Linda Baddour continues to amaze- I could not recommend her enough. I’ve worked with her twice now, and she never fails to deliver. Whether you’re a first-time homebuyer or looking for your next home, she is an incredible resource and always puts your best interests first. You’re in great hands if you work with Linda!

Yuthika Agarwalla

We had a very good experience working with Craig McGuire for our house hunting needs! He was very prompt, professional, and made us feel very supported across the entire process. Craig’s well rounded and extensive background in real estate was a huge asset to have. He’s extremely knowledgeable about the Austin real estate market. Ultimately we got the house we wanted, quickly, at the price we desired, and with the contingencies we needed. Thanks Craig!!

Jeremy K

I worked with Jeremy Vandermause to buy my first home. Jeremy was so patient throughout the process (which I definitely dragged out as I gathered all the facts). He consistently sent me homes I was interested in and was eager to show them off, and on the odd occasions where I found one he hadn’t already seen he always made himself available to walk through with me. He was very helpful in those walkthroughs pointing out home features I would have missed, or providing context on neighborhood. As a native Austinite, he definitely knows the history and cultural fabric of the city and each neighborhood. I started with close to zero knowledge of the home-buying process and Jeremy walked me through every step with clarity and patience. So excited about the home I now own! Plus, he’s just a legit cool dude. I always really enjoyed our conversations and could tell from the start he was someone worth knowing in Austin

Jeremy K

I worked with Jeremy Vandermause to buy my first home. Jeremy was so patient throughout the process (which I definitely dragged out as I gathered all the facts). He consistently sent me homes I was interested in and was eager to show them off, and on the odd occasions where I found one he hadn’t already seen he always made himself available to walk through with me. He was very helpful in those walkthroughs pointing out home features I would have missed, or providing context on neighborhood. As a native Austinite, he definitely knows the history and cultural fabric of the city and each neighborhood. I started with close to zero knowledge of the home-buying process and Jeremy walked me through every step with clarity and patience. So excited about the home I now own! Plus, he’s just a legit cool dude. I always really enjoyed our conversations and could tell from the start he was someone worth knowing in Austin

Caitlin Henson

I highly recommend working with Alex Ellis and am so thankful he helped us last year to close on a lot for our future dream home. Alex is thoughtful, takes time to explain the process, and goes the extra mile to communicate. He was an especially valuable thought partner during the negotiation to close the deal. I look forward to partnering again on future transactions!

Chelsea

Buying a house in today’s Austin market is a daunting proposition, but Kasey Gilliam made it as easy as possible. I was buying my first home and had lots of questions (not to mention the questions I wouldn’t even think to ask) – Kasey was great with all of it! Patient, diligent, and always there to guide me through it. She worked tirelessly to make sure I found the right house that met my needs and fell within my budget. Kasey was invaluable when it came time for closing. I didn’t know the first thing about how the process worked, and she guided me through every step. I can’t recommend working with Kasey enough!!

Sam Reicks

I worked with Jeremy Vandermause. He was great! He was very available and flexible. Over a couple months we ended up submitting 20+ offers and viewing tons of properties, often with last-minute notice. In the end he found a FSBO property that he connect me with. I never could have found it without all his help and work.

Natalie Blanco

Have been working with Alex for the past 2 years and it’s been amazing! I’ve bought 3 homes and sold 2. Alex E. is so communicative, friendly, has my best interest in mind and is just a joy to work with. Highly recommend