While much of the country continues to reel from COVID-19 closures, our Texas capital city is poised for a solid comeback. The outlook for investing in Austin real estate remains positive, especially in the multi-family home sector. With one major manufacturer already breaking ground in Austin, and another in serious talks with Travis County, an already burgeoning market is poised to become even hotter, as people from around the country continue to relocate.
Titans of Industry Call Austin Home
In late 2019, Apple began shipping its MacBook Pro from a production facility in Austin, and the tech giant isn’t stopping there. In November of 2019, Apple broke ground on a $1 billion, 3-million-square-foot campus that will first house 5,000 employees, with the capacity to triple that number. The new facility is scheduled to open in 2022. Most recent numbers show Apple already employs 7,000 people inside Austin city limits. With a median employee age of 30 or younger, multi-family units will be a hot commodity as a younger set flocks to Austin in search of tech jobs at one of the most recognizable brands in the game.
Although once perceived as nothing more than a negotiating tactic, the man intent on colonizing Mars has his eyes set on Austin first. Elon Musk announced his plans to move a Tesla gigafactory out of California in May after COVID-19 restrictions disrupted Tesla’s ability to assemble vehicles. He tweeted that an “unelected & ignorant ‘Interim Health Officer’ of Alameda [County] is acting contrary to the Governor, the President, our Constitutional freedoms” and “Tesla will now move its HQ and future programs to Texas/Nevada immediately.” The proposed factory move would bring a $25 billion investment and around 30,000 jobs to Travis County (home to Austin), where Tesla’s Cybertruck and Model Y SUV would go into production. Musk already has ties to Texas in McGregor, where SpaceX’s Rocket Development and Test Facility is located.
With California becoming increasingly unfriendly to large and small businesses alike, it’s not out of the realm of possibility that even more corporations will follow suit.
Austin’s Population Surging
According to U.S. Census Bureau data, Austin’s population has jumped significantly in the last decade, bouncing from 14th to 11th on the list of the country’s most populous cities. The city is expected to enter the top-10 city list sometime next year. KVUE’s Boomtown 2040 report predicts that by 2040, up to 3.9 million people may call Austin and its surrounding areas home. Even the Austin-Bergstrom International Airport is preparing for the wave, planning to double in size in order to accommodate more travelers.
Millennials seem to be especially sold on Austin. As COVID-19 continues to put a clamp down on earning power in some sectors, states like Texas are especially attractive as they tout zero state income tax. 2018 saw a net migration of over 53,000 millennials into the Lone Star State. Over 192,200 people between the ages of 25 and 39 moved in, and around 138,700 moved out. Overall, Texas ranked top for millennial moves and Austin ranked third for cities, with San Antonio and Houston also featured in the top 6.
As people from heavily populated states like California and New York continue to stream in, affordable multi-family housing will be in high demand. Austin has already seen the writing on the wall, with city officials permitting over 9,000 multi-family units in September 2019, more than any other city in the U.S. at that time.
Austin Turns the Tide
Austin’s economy was firing on all cylinders before the pandemic, posting a 7.7% increase, according to the Dallas Fed. Then, COVID-19 sent the nation into economic freefall, and Texas fell with it, but the tide is already beginning to turn. Austin may find itself better able to weather the storm due to its large population of professional services and technology industries, which lend themselves to telecommuting. First-time unemployment claims were down in Travis County for the third week in a row as of May 23rd.
Not slowed down by COVID-19, multi-family investors are still finding reliable tenants to pay rent. Here at Rastegar, 98.5% of our residents companywide are up-to-date on their rent. On top of that, Austin businesses continue to innovate, utilizing video conferences and curbside pickup in order to keep retail holding steady.
Don’t Count Austin Out
As major corporations and young professionals continue to be drawn to Austin’s business-friendly policies and millennial vibes, a need for multi-family housing is sure to follow.