Real estate in Austin, Texas continues to impress investors as it steadily rises. A new condo culture has developed and Austin has yet again hit the top ten list for hottest real estate markets.
Considering one of it’s most popular slogans is “Keep Austin Weird,” the Texas capital is clearly not like the rest of the Lone Star State. It’s not the endless series of strip malls with Texas Roadhouse locations like you’d find in Dallas; or the sprawling, humid megaplex of highways and swamps that constitutes the Houston area. And while Austin is the political center of the largest state in the continental United States—one that is notably conservative—it boasts a liberal streak that is reminiscent of a major metropolis along the Pacific Coast. And it’s seemingly endless real estate boom is just another addition to the metroplex’s unique dichotomy.
With a vibrant cultural scene, Austin has always been best known for its multitude of bars and clubs that have live music just about every night (and day) of the week, allowing it to be dubbed “The Live Music Capital of the World.” But over the past few decades, the city has become a year-round vacation destination for artists, foodies, musicians and world-changing tech culture with monthly arts, film and music festivals like South by Southwest and Austin City Limits.
The area is known for overall hipness and long-running track record as a place where world-changing arts and culture premieres. Which has driven billions of dollars to the city’s economy. Making it a haven for the next big tech startup and quite simply a place everyone suddenly wants to visit.
Thanks to all this popularity, the median home price in Austin has risen steadily almost every year over the past few decades. Much to the glee of the Texas Real Estate Commission—and that includes the time during the Great Recession. Which raises the obvious question amongst the prospecting local, national and even international real estate investors: when is the Austin housing bubble finally going to burst?
According to numerous local real estate analysts and experts—including Zillow—the answer is: not anytime soon. In 2018, Austin was once again named as one of the top ten hottest real estate markets in the country, landing at number six nationally on this year’s list. The average home in Austin is priced at nearly $400,000 which is up over seven percent from the year before. And according to Realtor.com, the Austin real estate market has rebounded better overall than any of the 50 largest metropolitan areas in the United States since the depths of the 2011 Great Recession.
And so far in 2018, these beginning of the year projections have proven to be modestly low. In March alone, the real estate market rose at a record pace. There was a ten and a half percent increase in overall sales in the Austin metro area, the most ever. And the time homes for sale were spending on the market fell to just over two months, with more modestly priced homes under $250,000 only sticking around for an average of 50 days. According to Zillow, the median price per square foot in Austin is $210—which is nearly double the $123 per square foot average of other major cities in the state of Texas.
The ideally-located neighborhoods like Barton Hills, West Lake Hills, Bouldin Creek and Old West Austin price out at nearly $300 per square foot. In short, the best deals will still have to be found on craigslist Austin, rather than the local real estate listings.
Gentrification in Texas
A lot of this buying can be attributed to the gentrification of the eastern portion of Austin. An entire region of town that was previously ignored by much of the general populous. However, as the cultural scene in Austin began to boom the popularity so did multi-week events. Including South by Southwest and the Austin City Limits Music Festival. The Eastside has become one of the best locations in the whole city. Mostly due to it’s proximity to the 50-acre University of Texas campus. Which is located in the middle of the city and downtown bar and music districts like 6thStreet and Red River. Even now, there are still affordable properties nearby the hippest areas of the city. Which, with a little remodeling and interior design, will become four figure per night rentals during the major event months.
More than 20 new skyscrapers have been built in Austin within the past decade. This is creating a downtown condo culture in the city for the first time. More are planned in the near future which is promising. Paired with the high probability a Major League Soccer team will move into the city. Becoming the cities first professional sports franchise. Not counting the annual F1 Race that arrives every October. As has always been the case, the city isn’t like everywhere else. It plays by its own rules, making that real estate bubble burst far from inevitable.