Recon, the on-line publication from the Texas A&M Real Estate Center, reported this week that Austin ranked number 3 in cities in both the USA and in Canada that have jobs and services in the technology industry. Tech jobs in Austin grew a whopping 33.3% from 2013 to 2015 vs. the national average growth of 7.3%. The article didn’t state how many jobs this growth represented but let’s just agree that it is a bunch!
The article also commented on the Austin office market. Austin ranked second in the nation on net absorption of office space. Well this fits nicely with all of the high tech jobs coming to office because those firms can’t work out of a tent! The Austin office market had the distinction of having the 8th highest office rent.
What does all of this mean to us investors in Austin area real estate? It means that all of these new comers to the Austin area have to live somewhere and residential rentals provide that need.
This is especially true when taking into consideration that many high tech employees are millennials who seem to have an aversion to buying a house. I interpret this information to mean that the high paying tech jobs spurn office growth which in turn spurns construction jobs, which spurns jobs in the retail and service industries which in turn spurns a demand for housing. The Austin area has a strong residential rental market and the outlook seems to indicate that this demand will continue into the future.
So hang onto your Austin residential rentals, keep them well maintained, and enjoy your profits.
Rick Ebert / Austin, Texas / 1 Dec 16