Austin is the top real estate market in the nation to watch for real estate investment and development, according to the Urban Land Institute’s 2016 edition of Emerging Trends in Real Estate. Austin, which has been a top 10 fixture for the past few years, switched places with Dallas, which had been the top market in 2015. Houston topped the list in 2014.
The Austin market “has benefited from a diverse economy that was affected in a minimal way by the global financial crisis, a growing population base made up of an educated labor force, and the undeniable ‘hip’ factor that makes Austin attractive to the millennial-dominated workforce,” read the report.
Despite its popularity, Austin is relatively small compared to some other United States cities in terms of its investment opportunities. “While Austin is unlikely to attract a meaningful amount of off-shore capital, it tops many domestic investors’ wish lists. This makes the market very competitive.”
The results incorporated rankings and opinions from 1,500 real estate professionals. They noted several potential downsides to the Austin market, including transportation issues and the increasing costs to live and do business in Austin.
For new home construction, Austin came in 11th, a possible reflection of the cost of new construction, factoring in high land costs, plus increased labor costs due to competition.
For 2017, the report noted the housing market outlook is good as it “appears to be making adjustments to match supply with the requirements and locations desired by the changing population base.”