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Why
Investors Like
Austin
Austin
uniformly represents what is best in America. Beautiful and
diverse scenery, hills and lakes, comfortable weather, multicultural outlook, enthusiastic business climate all help make
Austin
a fabulous place to live and work. Many other lesser known factors
contribute to
Austin
's value; for example, did you know that that each year, the film industry
infuses millions of dollars into
Austin
's local economy?
But wait, you say: Is the time right to invest in
Austin
? Samsung and Whole Foods think so!
See for yourself in the following chart:
Austin
shines brightly enough that
Austin
area home values have held up well through the stock market difficulties, tech
industry layoffs, and the aftermath of September 11th.
None of us can predict the future or can accurately assess the effect of current
economic conditions. But you can use historic data as a tool to help
determine where you might best invest. Although I have no crystal ball to
tell you how your investment will fare here or anywhere else,
Austin
's long term real estate history shows that
Austin
has been a fine place to own property. Currently, sales are up
significantly (see chart below) and
Austin
has more inventory than it has had in years; the frenetic pace of sales has
moderated enough to where some investors are finding excellent buys.
Following are some examples of recent years' appreciation in the Austin area:
Average
Sales Prices
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1990
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1995
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2000
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2003
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Avg.
Annual Appreciation
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$87,600
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$125,700
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$191,200
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$197,000
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6.25%
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Source:
Texas
A&M
Real
Estate
Research
Center
On
the following chart, note the dramatic increase in numbers of sales
for 2005:
In 2001, after ten years of strong appreciation,
Austin
's housing market so heavily favored sellers that buyers felt they had to jump
on the next acceptable property that came on the market. Buyers worried
they'd be priced out of the market.
Then from 2001 to 2003, as in many fine cities,
Austin
homesellers found themselves confronted with four economic realities that
affected home sales:
-
The dotcom bust
-
High tech
layoffs
-
Stock market
bust
-
Post 9/11
economics
One would have expected numbers of sales
to drop off. Yet, in
Austin
, sales remained remarkably consistent. While numbers of listings
went up, numbers of sales stayed the same, easing pressure on buyers to buy the
first home they saw. The result is that upward pressure on prices
disappeared, and prices remained almost flat. Now sales
are up, inventory is down,
Austin
is back on track, and you can see evidence of new appreciation in the above and
the following charts.
National
Business Experts Promote
Austin
as Among the Best in the Nation
Nationally respected professionals have each done their own research and
unanimously conclude that
Austin
is indeed a very fine place to live and to do business.
Click
on the following links:
Austin
rated #1 best place for business and careers
by Forbes Magazine
http://www.forbes.com/2003/05/07/bestland.html
Austin
rated #1
best place for making movies (BIG $$$ flowing into
Austin
)
http://www.moviemaker.com/issues/53/top10.html
Rated
#3
best housing market (for investment) over the next five years,
The Meyers Group
http://www.namc.com/hottips/where_invest.asp?lrid=
Austin
rated one of the three best big cities
by MSN
http://houseandhome.msn.com/Move/BestPlacestoLive0.aspx
In
top
ten best places to live,
Money Magazine
http://money.cnn.com/2002/11/08/pf/yourhome/bplive_austin/index.htm
#1
best place for families, Employee Relocation Council (ERC) and Primacy Relocation
http://sev.prnewswire.com/television/20041029/CLF05529102004-1.html
"
Austin
has done it again," said Matt Spinolo, Primacy's CEO. "It's already
ranked number one for relocating families. Now it seems that
Austin
is the best city for transferees with or without a family." ERC and
Primacy produced a related survey this past May, naming the Best Cities for
Relocating Families.
Rated
#2
best place to live and work, Employment Review June 2000
http://www.simplysiestakey.com/bestplaces.html
Top
Ten best places to live and work, Monstermoving.com
http://www.monstermoving.com/Find_A_Place/FAP_Article/Americas_Best/Best_Places.asp
#2
out of 200 best places to do business, Forbes/Milken 2001
http://www.forbes.com/lists/home.jhtml?passListId=1&passYear=2001&passListType=Misc
#2
out of top 50 best places to do business, New Economy
http://www.neweconomyindex.org/metro/rankings.html
#4
in the nation for hottest job growth, Business 2.0 (via
Austin
Business Journal)
http://austin.bizjournals.com/austin/stories/2004/02/23/daily8.html
#6
in the nation for best schools, Forbes
http://www.forbes.com/realestate/2004/02/13/cx_bs_0213home.html
Insider News Report: This just in from the Neal Spelce Austin
Newsletter, www.austinnewsletter.com):
"The
US Department of Commerce (headed up, incidentally, by Texan Don Evans)
crunched the 2002 numbers and found that
Texas
has become the nation's leading exporter--surpassing the other giants,
New York
and
California
. In 2002, the
Lone
Star
State
accounted for a significant 13% of all exports.
For
years we've told you how
Texas
has been affected more and more by global affairs. Long gone are the days
when cotton and cattle drove our economy. But it's only been in recent
years, when
Texas
has become a major business and high tech center, that products produced in
Texas
become heavily reliant on world markets."
This
means that that
Texas
continues to diversify its economy, which is good for
Austin
investors.
Austin Geography
Austin
is located on Interstate 35, deep in the heart of
Texas
. Exceptionally central to major
Texas
cities, Austinites enjoy moderate drives to
Houston
(2 ½ hrs) Dallas & Fort Worth (3 ½ hrs), and
San Antonio
(1 ½ hours).
First time visitors are often
pleasantly amazed with the unexpected variety in local terrain within 30 minute
drives around town. Geographically,
Austin
is split vertically by the Balcones escarpment, yielding lakes and cedar
covered limestone hills to the west and flatter farmlands of black clay to the
south and east.
Austin
is also bisected horizontally by lovely
Lake
Austin
, formed by the
Colorado River
. The following neighborhood characterizations are
generalizations, with some semblance to the truth . . .
Typical
Austin
Neighborhoods (click on pictures and links for examples)
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Central Austin is urban living: University neighborhoods, cultural
activities, eclectic shopping, downtown lofts, hike and bike trails along
Town
Lake
(
Colorado River
). Downtown is healthy, bustling with business, new construction and
reclamation of old neighborhoods.
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South Austin
, affectionately known to include counterculture and artistic types, is
home to many famous and not-so-famous musicians. Austin's well deserved
reputation as the Live Music Capital of the World is evidenced by
the highest per capita number of live music venues, most of which are
close to downtown.
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North Austin, along with close neighbors Cedar Park/Leander, Round Rock
and
Georgetown
is more mainstream.
North Austin
is home to Dell Computers and tech companies like IBM, and has a mixture
of more affordable homes and premium properties, depending on how far west
and how close homes are to the hill country.
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West Austin
is situated at the edge of the Texas Hill Country features a dramatic
change in
terrain. Many homes are situated on the sides of steep limestone hills,
enjoying stunning views. Property values are high for
Texas
, but still bargains compared to other states.
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East and
Southeast Austin
are the most affordable areas. For years,
Austin
's airport was located in east
Austin
and stunted its growth. Now with a brand new airport southeast of
Austin
, east
Austin
is being revitalized.
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Northwest and southwest
Austin
are more like west
Austin
, transitioning from the flat farmland to limestone hill country, with
midrange property values.
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Investment
Opportunities
Where is the best part of
Austin
to invest? Inner city neighborhoods of fine old properties are good for
appreciation, suburban areas are better for cash flow. Suburban areas are where
one finds modern homes that have fewer maintenance problems.
Inner city properties are fine for local investors who can easily oversee
maintenance and improvement issues. Out-of-town investors
are probably better off with much newer buildings, which are mostly located in
suburban neighborhoods.
Historically in
Austin
, the short-term investor usually must hold a property at least two years
before recovering equity in a sale.
The long-term
investor (at least 8 years) does well to choose neighborhoods where growth
is prominent, where some infrastructure is still in development, and where rents
are high enough to support the sales price and cover a significant part of the
monthly payment.
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anuminocha@gmail.com 
Tel (408) 887-4493