Austin Competes for Investors on the World Stage
Austin, Texas is no longer merely a hub in the Texas economy. This city is rapidly becoming a global force in its own right. More and more, international investors are turning to Austin as a place to do business. And business is booming across the board. Rental markets are up, the commercial real estate market is growing and Austin features a robust housing market with several neighborhoods to watch.
Let’s take a look at the factors that are pushing Austin into the global spotlight.
Desirable Rental Market
Real estate investing firm HomeUnion recently ranked Austin as the 9th most desirable rental market in the United States. Market conditions in this city are exactly what rental investors want to see. Employment is up roughly 3.6% from 2009, average rent has increased nearly 10% since that same date and vacancies are down. Today, Austin boasts a vacancy rate under 5% whereas 2009 vacancy rates hovered between 10% and 15%.
In other words, rental units are getting snapped up in this city. Limited vacancy makes this market competitive among potential renters who are willing to pay a premium for a great unit.
Commercial Real Estate Growth
When it comes to commercial real estate growth, Austin ranks 23rd worldwide according to JLL’s 2017 Investment Intensity Index. This ranking hinges on a couple of factors, namely the $9.5 billion investment poured into Austin’s commercial real estate market between 2014 and 2016. At the same time, this city boasted a GDP of $113 billion. According to JLL, Austin registers at an 8.5% investment intensity. Meanwhile, cities such as New York, a known global leader, have a comparable investment intensity of 10.6%.
And these numbers are not coming from one specific section of the commercial real estate market in Austin. These figures take into account retail, logistics, hotels and office space, with Austin’s retail market leading the way in JLL’s top 20 list.
Healthy Housing Market
In the residential sector, housing prices in Austin have soared 65.5% between 2006 and 2016. Experts forecast that 2017 will be a normalizing year, with prices expected to level off as the market stabilizes. With expansion like this, Austin leads the nation in property appreciation rates. This largely stems from the huge influx of people flocking to the city to take advantage of a plethora of high-quality jobs. Residential investors will find a solid market here, one in which they can make safe investments now and in the future.
Markets to Watch
Which neighborhoods will the savvy investor watch in the coming years? Round Rock is a good candidate for residential investors. This is an area that is rapidly expanding as the rest of the city develops. In fact, this year, a new 82-unit development consisting of townhomes is in the works.
Both the Bee Cave and Lakeway areas are also reporting massive growth. In 2016, this area saw plans not only for housing developments but also for expansion to retail outlets, services and office space. With these areas in close proximity to valuable jobs and amenities, these two markets should be interesting to watch in the coming years.
The more you look at this city’s vibrant economy and robust real estate market, the more you’ll understand why Austin has risen to a place of global prominence. These days, this Texas city is capable of competing with investment giants, including places like New York and Tokyo.