Austin ranks among the nation's premier real estate investment markets. According to US News rankings of 125 metro areas, Austin is #1 in Best Places to Live in the USA. The city's rental sector experiences robust demand as people continuously relocate here.
The Catalyst Behind Austin's Top Real Estate Ranking
Austin's appeal extends beyond its reputation for vibrant culture, pleasant climate, and music venues.
A Market Driven by Economy and Jobs
The region's diverse economy and strong labor market attract newcomers at an extraordinary rate, in excess of 55,000 people a year. This population surge creates sustained housing demand, with over 40 percent of the houses in the metro area occupied as rental properties.
Real Estate Market Analysis
Key investment metrics for 2019 included:
- Median home sales price: $296,999
- Median traditional rental income: $1,518
- Median short-term rental income: $2,109, with recent increases up to 38%
Long-Term versus Short-Term Rentals
Long-Term Rentals
Traditional rentals typically span seasons or longer. The university community significantly influences demand for long-term student housing.
Short-Term Rentals
Event-driven demand creates lucrative opportunities. Properties can earn upwards of $1,000 a night during annual events such as South by Southwest. Other drivers include university athletics, rodeos, music venues, and festivals.
Best ROI Areas in Austin
Downtown Austin
Downtown features a rental market at 67%, with properties ranging from $205 to $1,500 per square foot (2017 to 2019).
West University
This student-oriented area maintains a rental market over 94%, with properties ranging from $219 to $497 per square foot.
Allandale
This family-friendly neighborhood offers townhomes and condos with a median list price per square foot ranging from $305 to $318 during 2017 to 2019.
Zilker
Zilker maintains steady rental demand with prices between $265 and $637 per square foot, and home values are known to increase up to 10% a year!
East Austin
This renovated area attracts investors seeking affordability, with prices ranging from $142 to $576 per square foot.
Conclusion: Invest in Austin Real Estate
Austin's designation as a national hotbed of growth creates sustained demand across both affordable and premium rental segments.