Three cheers to Austin. It's the Lone Star States' big winner, and it might just be the country's brightest future.
According to a report by The Real Deal, the Texas state capital took the lead in a Zillow survey of industry experts, economists and investors, marking it as the U.S. city most likely to see home prices increased beyond the national average in 2021. The confidence is fueled by a strong December 2020, when home prices in the Austin metro area were up by almost 24 percent, exceeding even the largest national markets.
This transformative growth is the result of a variety of factors. For one, the pandemic has slowed the real estate market in typically large metropolitan areas such as Los Angeles, San Francisco and New York City. Since these markets are already among the most expensive in the U.S., they have “less room to grow," so even as prices in L.A. hit record highs, the growth is simply not as prominent as Austin’s sudden spurt.
Silicon Valley has taken notice, too. Many of the tech world's largest companies - PayPal, eBay, Microsoft and Facebook among them - have opened offices in the area, leading to a high-tech industry growth rate of 25 percent since 2015. It’s highly likely employees would move to Austin in the footsteps of their companies, or that their mere presence would attract young professionals. That seems to reflect in the numbers. Redfin home searches in the Austin area increased by 16 percent overall, and 43 percent of Austin searches during the last 3 months of 2020 were from people who didn’t already live in the city.
This growth is not new. Austin topped the same Zillow survey in 2019, proving the industry felt confident about the Texas capital's growth even before the pandemic. As professionals continue to seek more spacious and affordable housing, Austin's growing economy, rich cultural amenities and promising opportunities will surely shine an attractive beacon.