An exponentially growing population means a healthy real estate market. In Austin, Texas, where the population is continuously expanding, land and real estate developments are a hot investment opportunity that promises an ROI for investors.
But, what’s driving Austin’s rapidly growing population, and is it sustainable?
We’ll answer this and more in today’s article.
What’s causing Austin’s uptick in population growth?
As the 11th most populated city in the United States, Austin has shown significant growth in their population over the past few years. The Census Bureau estimates that the city’s population increased by 146 people per day in 2021.
What’s driving this trend?
Keep reading to learn the top three factors that have caused Austin’s increase in population growth and what this means for investors.
Remote Workers Move To The Sun Belt For More Space
The newly adopted work-from-home lifestyle is one of the primary factors in Austin’s exponential population growth.
Between 2020-2021, amid the pandemic, the nation saw an increase in people moving to new cities thanks to their newfound remote workforce status. And with more opportunities abound nationwide, much of the population across the U.S. began reassessing their living situation.
As people began trading in their tiny pricey apartments for more space in the suburbs, densely populated urban cities such as New York City and Los Angeles saw a substantial loss well into the six-figures. In contrast, cities in the Sun Belt, including Austin, Texas, saw significant growth.
When it comes to cities that saw the most extraordinary population growth between 2020-2021, Austin ranked 4th nationwide with an increase of (+53,301) residents, while nearby San Antonio ranked 8th with a growth of (+35,105) new residents.
Experts expect this growth to continue well into the coming years as more employers see the value in hiring from a nationwide remote talent pool.
Major Tech Corporations & Employers Drive Austin’s Growth
Austin’s diverse economy began during the dot-com boom when many employees lost their jobs. Austin encouraged more medical and biotech companies to relocate to the city to mitigate these employment concerns, opening up more jobs for professionals.
In recent years, Austin has become the new home of multiple major tech giants that have chosen to relocate to the capital of Texas from major hubs like New York and California and numerous promising startups.
More than 3,300 tech companies call Austin home, including several surpassing the billion-dollar valuation mark, such as IBM, Amazon, Apple, Facebook, Cisco, Google, Tesla, SpaceX, and Oracle.
With over 100,000 high-tech employees in the city, Austin has earned its brand as Silicon Hills.
The wealth of these high-paying tech companies has enabled Austin to record the highest salary rate per person in Texas, attracting employees from other states to relocate to the capital of Texas and nearby cities.
These diverse job opportunities in Austin contribute significantly to the steadily increasing population of the city and the need for more housing developments.
The prospect of investing in real estate developments near a major tech hub like Austin, with its diverse workforce of high-tech employees, offers promising returns for investors well into the coming years.
Austin’s Growing Number of College Students
Around half of Austin’s population is between 18 and 44, with the majority being college students.
Austin is home to several excellent colleges and universities, including the University of Texas, Austin Community College, Huston Tillotson University, Saint Edward’s University, and National American University. All of which attract students relocating from all over the country, playing a pivotal role in Austin’s population growth.
The University of Texas alone has more than 40,000 students, and Austin Community College has almost the same number. Most of these students are willing to rent housing for higher prices to ensure that they reside within accessible commuting distance to their schools.
Because of the abundance of high-paying jobs in the city, graduates of these schools often choose to stay in Austin for the optimistic employment prospects and relatively more affordable cost of living than the rest of the country. All of which add to Austin’s increasing population growth.
What Does Austin’s Population Growth Mean For Investors?
The continuous increase in Austin’s population has been met with a shortage in housing supply, calling for more real estate development as a vital necessity in the coming years to accommodate Austin’s exponential population growth.
Currently, because of the city’s attractiveness to both employees and students, Austin’s supply of housing has not been able to keep up with this demand. As such, investors looking to enter the real estate market will do well by investing in Austin over the next several years.
Austin’s population growth is pushing the price of housing in Austin higher. The Austin Board of REALTORS recorded a rise of 22.6% in housing prices in March 2022 alone, which is a new all-time high for the city.
The median home price in Austin is $620,000, with a median rental rate of $1,950 per month for renters. With more high-paying jobs in the city, more people are willing to pay higher housing prices.
If you’re an investor looking to enter the real estate market, now would be a great time to consider Austin as the increasing population guarantees housing developments to be an instant hit.
At Red Oak Development Group, we work with investors on multiple projects in and around the Austin area. Our team brings decades of experience to the table, and every project is location-driven, emphasizing the growing population, growing median income, and demand for housing.
We’d love to tell you more about our Austin investment opportunities.
