During the pandemic, Elon Musk announced he’s bringing his businesses, Tesla, Space X, and the Boring Company, to Austin. Oracle recently announced they’re relocating their headquarters to Oracle as well. Dropbox’s CEO also announced plans to move to Austin. Some have labeled it as a “tech exodus” from the Bay area.
Austin is not only a popular location for new businesses, but current companies are expanding too. Apple is spending $1 billion on a new campus in North Austin. The campus will be 3 million square feet and less than a mile away from its current location. It’s predicted to add 15,000 more workers to the existing 7,000.
According to the U.S. Census, Austin is the fastest-growing major metro area in the country. And according to the Austin Chamber of Commerce, 58 corporations relocated to Austin, but not including several dozens of companies that opened secondary offices in 2019. They also shared that 28 relocating companies have announced a little more than 9,000 new jobs this year.
Why Are Businesses Relocating?
Due to the pandemic, most companies are working remotely now. Hence, companies no longer need their current corporate offices and are free to relocate. The opportunities are endless for businesses. Austin appeals to companies because of low state taxes, access to global markets, the research environment, fewer restrictions toward COVID, and being an export hub.
Austin has a considerably lower cost of living when compared to Silicon Valley. Plus, a California salary will go further in Austin than in California. And Austin appeals to transports for its mostly sunny weather, no state income tax, lower rent and home prices, and unique culture.
Tech has always been a staple in Austin, so it only makes sense that it expands. Austin has had rapid tech growth in the past few years. Some key players that made Austin the tech hub it is now, Samsung, Dell, IBM, Apple, Google, Indeed, Atlassian, Facebook, Amazon, and Capital Factory, which specifically focus on tech. Austin has been given the nickname “Silicon Hills.”
The Effect
The median home value is currently $365,000, according to the Austin Board of Realtors. The national average is $320,000 as of October. Home prices have increased so much that Austin now has its first $1 million neighborhood, where homes ask for a price of at least $1 million. While the nation had a decrease in residential buyer activity, Austin was thriving, with pending home sales up 41% compared to last year.
Read our 2020 Real Estate Market Review blog for all the statistics.
October has been the third consecutive month of double-digit home sales. Median sales price increased to $365,000, which is an all-time record. Pending sales and new listings also increased.
Rent has also increased. The average one-bedroom apartment in Austin is $1,284 a month. But when you move downtown, it’s more like $2,000. Millennials are the generation that’s more likely to rent. They are also the majority of workers at these tech companies, so it’s expected rent will increase. But that’s nothing compared to a one-bedroom apartment in the city by the bay at almost $3,280 per month.
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