Austin is Hot

General Real Estate Investing
14yFollow

Austin is Hot

Jon Klaus
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes

http://www.bizjournals.com/austin/news/2012/02/23/forecast-austin-job-growth-revs-up.html?ana=lnk

Some highlights:

19,000 new jobs are expected this year after 13,000 last year.

Unemployment rate could drop below 5% in a year.

Office space is at an 88 percent occupancy rate and rising with very little new coming on line this year.

Retail is at 94 percent occupancy. Only 400K square feet coming on line this year. That's about the size of one large Ikea.

Last year, about 39,000 people moved to Austin. Expectations for this year, 42,000, and 48,000 more in 2013.

The 2010 census showed population of 790K, so the current growth is over 5% per year. How many other top 25 cities are even close to that?

What would be your investing approach in Austin?

3Reply
332 views

Most Popular Reply

Bryan Hancock
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
14y

Apple is creating 3600 new jobs here now:

Press Release

Austin is the place to be!

3Reply
See this reply in the discussion

182 Replies

Jump to latestLatest
  • Rich Weese
    Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
    14y

    How about DALLAS!!!!

    1Reply
  • Tod R.
    Investor · Southlake, TX · Member since 2009 · 950 posts · 338 votes
    14y

    Maybe Bryan Hancock can speak to this in detail, but I've heard new construction for multifamily in Austin is pretty tough. This would add value to existing MF or single family.

    0Reply
  • Jon Klaus
    OP
    Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    14y

    I would say that Dalles is healthier than most of the nation, but growing at less than it's historic rate of 2% per year. Maybe 1.5%.

    0Reply
  • Rich Weese
    Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
    14y

    Jon-crap. Rich

    0Reply
  • James H.
    Investor · Fort Worth, TX · Member since 2011 · 1k+ posts · 450 votes
    14y

    That is pretty amazing. I wonder what the occupancy rate of all those new highrise down town condo projects is. I noticed last time I visited (a couple months ago) that construction resumed and they appear to have been completed.

    0Reply
  • Sam Craven
    Houston, TX · Member since 2011 · 673 posts · 360 votes
    14y

    hopefully i will be one of the 48k in 2013! Love Austin Once my wife is finished with school we are moving. Thankfully i can live anywhere in Texas and this gives me time to acquire some property in Houston where it is still easier to get cash flowing properties.

    0Reply
  • Martin Vergara
    Real Estate Investor · Austin, TX · Member since 2008 · 12 posts · 1 vote
    14y

    Jon you are correct Austin is hot, in my opinion it has turned to a sellers market. I am purchasing my personal residence and was out bid on 4 of the 5 I put offers on all which I found out were for more than asking price and no concessions . I think there are still plays for investors in the rehab and hold as rental, at least that's my plan. Check out Texas a&m real estate website awesome market analysis for Texas cities you can see the growing parts of Austin .

    0Reply
  • Rich Weese
    Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
    14y

    Dallas isn't bad either! I just received my weekly report showing two vacancies out of 154 units!! Might be time to start raising rent. Rich

    0Reply
  • Tod R.
    Investor · Southlake, TX · Member since 2009 · 950 posts · 338 votes
    14y

    98.7% occupied. Thats pretty impressive Rich Weese no matter what market or how hot it is!

    1Reply
  • Carlos Flores
    Commercial Real Estate Lender / Syndicator · Dallas, TX · Member since 2011 · 888 posts · 309 votes
    14y

    I miss Austin, but like Rich said Dallas isn't bad either.

    0Reply
  • Bryan Hancock
    Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
    14y

    Austin is so hot that I am just now replying to this post at 7:19pm in the evening. I have been working all day with land developers on a 33-unit development near downtown. Jon K. and one of my buddies are doing a rehab off of 12th Street. We closed a construction loan for a new project last Friday and we are actively bidding on new projects. The last land deal we tried to secure already had 20 (!!!) offers on it.

    I really think there will be a housing shortage in Austin in the coming years. Hopefully we'll be able to organize capital quickly enough to take advantage of all of the growth. Some of the projects we have are just freaking fantastic.

    I'm happy to talk to anyone about Austin if you want to know more ;-) I have lived here for 29 of my 33 years and and I know the city really well.

    0Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    14y

    Is there not severe droughts there??

    Last I heard certain parts of Texas had sever water shortfalls.

    When that happens I have seen government and cities put moratoriums on any new projects or development or adding onto existing development because current resources are tapped out.

    Also if the sewer system is at capacity they will not let you tap into it.Development might be booming but there will be a time for certain asset classes where you can hit over saturation.You don't want to be the one falling down when the musical chairs stop.

    Podcast Guest on Show #47
    NNN Invest53 Reviews
    WebsiteView Page
    0Reply
  • Tony A.
    Attorney · Albuquerque, NM · Member since 2009 · 5 posts · 0 votes
    14y

    New in town and happy to hear this great city is thriving -- sounds like there's lots of opportunities across the spectrum. Bryan, I may soon take you up on learning more about Austin! Cheers,
    Tony

    http://bizbeatblog.dallasnews.com/archives/2012/02/forecast-texas-cities-tops-for.html

    0Reply
  • Sam Sagor
    Residential Landlord · Kailua-Kona, HI · Member since 2012 · 111 posts · 15 votes
    14y

    Does anyone have any good pointers for someone on the verge of moving to Austin? My fiancee has a school on 6th street (by the university) she already attends online. They give the option of coming in person or living off continent. This is one of the things that gives me the impression Texas is progressive. We are ready to jump but first we are looking at where would be the best place for a home base not necessarily in the city proper. Is it a good chance that houses outside the city (say Leander and Round Rock, the surrounding ones) are going to see great appreciation? This is based on the assumption that the sprawl will keep expanding would like to hear opinions on that.

    What we are looking for - what area does this best :
    good equity potential
    rehab (we want to redo the walls so extreme rehab)
    lot size over 1 acre
    In Austin? Easily changed if there's an up and coming town. Also looking at Dallas equity in next 5 years is the goal
    overriding factor : Does anyone here need an extremely motivated intern? I'd like to learn the ropes by doing.

    0Reply
  • David B.
    Santa Monica, CA · Member since 2012 · 12 posts · 1 vote
    14y

    Hi All, New to BP as well. Heard Dallas and Austin are great cities to invest in and Texas is outpacing all other states in terms economic growth and stability. I believe it surpassed CA last year. Can this count as an indicator, all the new TV shows being produced in Tx. :)

    @Bryan - I too would like to hear more projects and about Austin. The project sounds very cool since it's close to Downtown. Urban infill is the way to go. On top of it, getting a construction loan for the project, now that's an accomplishment in and of itself

    @John - Good luck with Dallas. I've heard over the last 1.5 years that cap rates have compressed and it's hard to find deals in the North Dallas markets. I couldn't believe it when I heard that in '09 investors were picking up units for 20-30K per. WOW!!!! How is it today?

    @Rich - saw the post about your book. I'm going to order it on Amazon. I want to read about your story. Sounds amazing from everyone who chimed in on the forum. Your also investing in TX? Amazing!!!

    0Reply
  • Bryan Hancock
    Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
    14y

    Three banks willing to do construction loans is a sign by itself too. I'm happy to talk to anyone about Austin if the contact me.

    The area I like the best if you want a lot bigger than 1 acre is Round Rock. That is where our personal residence is and the area is thriving. There are good schools for the kids and Williamson County doesn't put up with the BS that Travis county does.

    2Reply
  • Rich Weese
    Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
    14y

    David B- Yes I invest in TX. I have several hundred doors there as well as a 64 lot subdivision, about half built out with 3 more starting within 45 days. Thanks for ordering my Book. I hope you'll enjoy it. Rich

    0Reply
  • Kama Ward
    Investor · Asheville, NC · Member since 2012 · 184 posts · 76 votes
    14y

    Why is the economy so good in Texas? High price of oil? Not much housing bust 'cause of not much boom? Austin being the capital and having a big university certainly helps that city. What else?

    0Reply
  • James H.
    Investor · Fort Worth, TX · Member since 2011 · 1k+ posts · 450 votes
    14y
    Originally posted by Kama Ward:
    Why is the economy so good in Texas? High price of oil? Not much housing bust 'cause of not much boom? Austin being the capital and having a big university certainly helps that city. What else?

    Well, as you stated, the real estate market has been more slow and steady in Texas which took the edge off the recession. But Texas, once highly dependent on oil as its primary economic driver 25 years ago, is quite diversified economically today. There is a healthy tech sector, we have manufacturing for Bell Helicopter, GM and military contractors. Although Houston pitches in with a lot of help from the oil refineries, it is the shale gas industry that is growing fast in both south Texas and north Texas. Not only does Austin have a large university (my alma mater UT), so does Waco have Baylor University known for medicine and so does the metroplex have several large universities. Also, there is hardly a union presence and the general business atmosphere in Texas is pretty friendly. People are constantly moving to Texas (and staying here), too, which helps with economic growth.

    We do have our problems in Texas, but Texas is a lot more than cowboy hats and oil rigs today.

    2Reply
  • Rich Weese
    Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
    14y

    So many reasons! Right to work state-no state income taxes-tremendous business climate- Tort reform ( Loser pays in lawsuits!) unlimited land available-low median price home-Rich

    0Reply
  • Jon Klaus
    OP
    Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    14y

    Kama Ward A few things:

    Favorable business climate
    ^^ means jobs leadership
    No state income tax
    Central location
    Cheap (abundant) land
    High value natural resources
    Entrepreneurial culture

    Conservative home lending standards helped keep things in check through the bubble. For the most part, you could only borrow up to 80% LTV for refinancing and home equity loans. The forced discipline paid off in the housing collapse.

    Check out this promotional video that lays out more strong points:
    http://www.youtube.com/watch?v=KmqKic5Y8DI&context=C33e156eADOEgsToPDskLKyOuHi6zyI6ydfGoSFnj2

    0Reply
  • Bryan Hancock
    Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
    14y

    Apple is creating 3600 new jobs here now:

    Press Release

    Austin is the place to be!

    3Reply
  • Jon Klaus
    OP
    Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    14y
    Originally posted by Bryan Hancock:
    Apple is creating 3600 new jobs here now:

    Press Release

    Austin is the place to be!

    The hottest.company in the world comes to the hottest city America. Apple's NET profit was north of a billion dollars a WEEK last quarter. Do you think these will be good jobs?

    1Reply
  • Bryan Hancock
    Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
    14y

    I'm not sure, but I know that one motivator is likely to compete with Dell somewhat. Jobs at Apple should probably attract high quality talent and have a nice multiplier through the greater central Texas economy. I expect many other companies to continue moving here.

    0Reply
  • Jon Klaus
    OP
    Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    14y

    Hipster central is getting more hip. Way too hip for me, but the least we can do is provide cool places for the ultra-hip to live.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free