2014 was characterized by continued job growth, especially in the tech sector. To say that Austin is becoming its own Silicon Valley is an understatement. As the tech sector continues to drive job growth, an influx of new residents will continue to push the Austin real estate market to keep up with demand. To that end, everywhere you turn, new construction abounds. Whether it’s off the beaten path in the suburbs, just around the corner from Rainey, or smack in the middle of downtown, new construction is also a pervasive characteristic of Austin. But unlike similar metros in the country, Austin isn’t just experiencing its own version of “urban sprawl,” rather it is seeing expansion both outward and upward as sky-high condos begin to do the Austin skyline.
Growth like the speed of light
Even with new buildings cropping up left and right, demand continues to outpace supply. But how high is demand? The answer is simple: pretty high. Unlike other hot markets like San Francisco, Los Angeles, and New York, homeownership is the preferred way of life for old and new Austinites. Overall cost of living in Austin is on the rise, but homeownership is still within the “Average Joe’s” reach. As of mid-2014, statistics told the story of the average Austinite–almost half of residents were homeowners versus renters. This is telling as rental prices continue to be the motivating factor for homeownership in Austin. Almost half of renters in Austin shell out at least a third of their income to rent and as new workers flow into the city that amount will only continue to rise.
To help new and old residents put down roots in the fledgling metro, builders are pushing to take advantage of the high demand. In 2015, local real estate pros expect new home building to rise by 10%. That being said, while single-family homes makeup a good chunk of the new units, condominiums can’t be discounted. Whether its proximity to the bustling downtown or protected views of the lake, having that eye over the ever-expanding metro is appealing to the millennial, young-professionals making a splash in the job market.
The Millennial Austin Buyer
Single family homes in Austin are naturally popular among families and younger couples looking to grow their family. However, much of the growth in the market, both job and real estate, is of the millennial variety. Since many of the new jobs in the area are tech-related, millennials are making up a good portion of the city demographic. National real estate forecasts anticipate potential home buyers to be increasingly millennial over the next five years. While owning land is no longer just a pipe dream for most, especially in Texas,
the young professionals of the new generation want more and more of what appeals to millennials: proximity to great restaurants, fun local hotspots, and great views.
What the high-rise condos of Austin offer up this class of buyers is everything is new and visually attractive. While single family homes are quickly cropping up throughout the city, even now buyers are having trouble finding enough brand new homes until construction catches up. For those with aspirations of being smack in the center of the city’s buzz, proximity to downtown is of keen interest and condos are the way to quell the thirst. Downtown condos whether a handful of stories or forty stories into the air, offer a life on the ground near offices of national financial heavyweights, outdoor patio bars on Rainey, and the hottest restaurants in town. From the sky, Austin condos like 360 Condominiums and The Austonian give home buyers incomparable views of the city and lake. Of course view and lifestyle come with a price and the more of it the more buyers will have to shell out. For those who see the value in homeownership versus fighting the confines of the limited rental market–which is at about 98% occupied–Austin real estate by way of condo-life offers buyers, especially the increasingly millennial portion of the group, an attractive avenue.
So you want your own piece of the pie in the sky…
Realtors throughout Austin are chomping at the bit to bring new and old Austinites into the homeownership fold. The combination of easing in the lending space–making homeownership more feasible for first time buyers–ever increasing prices, and limited supply means buyers are wise to have Realtors help them navigate the market. That being said, working with the right real estate agent who has demonstrated success and a keen understanding of your needs and wants will help you find your piece of the Austin pie. Some agents are specifically focused on the condo-side of the business, but just because one agent has had a few sales in the building doesn’t mean they’ll get you the right unit in that building or one down the street. Be prudent and vet a handful of recommended, successful Realtors–this is especially useful for those first time buyers in Austin, which is and likely will continue to be a sizeable portion of Austin’s soon-to-be homeowners.