Is Austin the right place for long term growth? You bet it is. In fact, we are personally betting on it. The clubs leaders own multiple rental properties in Austin and the surrounding areas. They’ve seen the growth that Austin has had and sustained over the years, even in a down market. They know why Austin is poised to further secure it’s top ranking and one of the first cities to move into economic (job and housing) recovery.
You see, Austin is uniquely positioned with multiple leading industries including: the seat of the state government, the capital of Texas, the home of the largest University in the World, The University of Texas, the home of some of the largest high tech firms in the industry, the live music capital of the world, and just a great place to live. When you combine all of these unique industries and perspectives, even if one were to falter (which has happened), the economy does not suffer throughout because Austin is diversified and hedged in different economic industries. Unlike Detroit, that relies mainly on a few industries that have cycle downturns consistent with the national economy, Austin is quite diversified and can withstand downturns quite well.
Austin never had a pricing bubble in the mid-2000’s. In fact our average price home is up around $10K above the average sales price high of 2008. (In 2008, the average price was $246.5K, through the first half of 2011, the average price is $256.6K.) We are in an enviable position and were leading the economic recovery out of the great recession.
However, Austin did have a volume bubble. Our volume is down by 1/3. In 2006, we closed 28.1K units, in 2010, we only closed 18.8K units. In addition, the number of active listings is up by several thousand today above what it was in 2006.
So, how did we sustain the economic downturn and have an increase in our sales price? Simple, we were diversified in multiple high demand industries that didn’t feel the brunt of the economy as bad as other places. In addition, unlike many states, in Texas we have a very strong pro-business environment that helps create and keep jobs.
But the better question is “How is Austin poised for the future?” To answer that, we’ll have to refer to some economic forecasting data. Specifically, our population is scheduled to double in the next 20 years due primarily to migration from other cities. If you want to test that fact, go to U-Haul and check the price to rent a truck from Detroit to Austin vs. a truck from Austin to Detroit. As of the time of this writing the rates are $1,165 and $582, respectively. They practically pay you to bring the truck back to Detroit because everyone is out-migrating from that city because of jobs. This is only a fraction of what’s to come.
Bottom line, you are in the right place and now is definitely the right time.