Austin Real Estate Market Analysis [December 2021]
The Austin real estate market is heating up with rising rents, growing home prices, and plenty of investor attention. See the data and analysis for yourself.
Austin is growing and growing quickly. By attracting huge businesses like Tesla and Samsung, Austin is becoming a new hub for innovation. With that innovation comes a huge migration to the city as people search for jobs nearby these employers. Buyers, sellers, investors, and renters are starting to pay closer attention to the developments in the Austin property market.
What you'll find in this report:
- Rent Analysis
- Sale Price Analysis
- Investor return analysis
- Growth projections
- Other Interesting Data about homes in Austin
Rents Steadily Increasing
- With all the hype about people moving to Austin, rents have stayed surprisingly stable for 2 bedroom apartments.
- Rents for two bedroom apartments went as low as $1,400 per month in Q3 2019 and peaked at the end of this year at $1,750.
- Rents for 3-bedroom apartments increased by 21% in the last 3 years from $1,650 to $1,999. We observed the biggest jump in Q2-2021 with an increase from $1,795 to $2,000.
- Rents from 4-bedrooms grew from $2,000 to $2,300 or 15% in the same time frame, with the biggest increase also in Q2-2021 from $2,000 to $2,395.
Extra Bedrooms Are a Premium
We also analyzed the premium that renters were willing to pay for an extra bedroom and found that the "home office premium" has increased significantly.
- In Q2 2019 people were willing to pay an average of $125 to get an extra bedroom. In Q2-2021 the premium peaked at $322.50 per extra bedroom.
- Today that premium is back to roughly $275 per extra bedroom, representing an increase of 120% or $150 per extra bedroom. Is this the home office tax, and if it is, should employers be paying it?
Highest Yielding Investments
- The highest yielding investment opportunities are in Killeen, Hewitt, Temple, Waco, and McGregor with a rental yields over 8.5% in each of these places.
- For property investors looking for deals under $200,000, McGregor (76657), Temple (76504), and Bellmead (76705) all have projected yields of over 9% with median 3-bedroom home values under $200,000
- Only Killeen, McGregor, Temple and Waco still had 3-bedroom homes priced under $200K.
- Travis Country has the most 3-bedroom homes priced over $750K.
The Best & Worst Rental Deals
- The best rental deals available under $2,000 are in Woodway with a median rent of $1,680 and a the median price for a home the same size at $614,500.
- The last place to get a 3-bedroom rental for under $1,000 in Austin is in Morgans Point (76541) at $940 for the median rental.
- Only 4 neighborhoods have median rents over $3,000 for a 3-bedroom. The Hills ($3,010), Bee Cave ($3,010), Austin ($3,920), and Rollingwood ($3,950)
Rent as a Portion of Income
- Austin (78739), Round Rock (78681), and Cedar Park (78613) have the best deals on their rentals, relative to income. Spending under 25% of monthly income on rent.
- Pleasant Valley, Mlk-183, and Robinson have the worst deals on rentals, all spending over 60% of monthly income on rent. With Pleasant Valley coming in at over 75%.
- Expect population to increase quickest in Canyon Lake, Liberty Hill, Buda, and Leander. If you're betting that housing supply will not keep up with 25%+ population growth in these areas homes will appreciate quickly.
- Incomes will rise 20%+ in the next five years in an incredible 34 of 78 zip codes in Austin, with Spicewood, Windsor Park, North Austin, and Pleasant Valley taking the lead.
- We use 3 bedroom homes. Smaller homes tend to have tenants who move more frequently (since they're occupied less often by families with school age children) and larger homes are often unnecessarily large for most families, making it take longer to find tenants for them.
- We only look at Austin area zip codes with populations of over 10,000 people to remove outliers / zip codes with very limited inventory.
- We included 79 zip codes that made up the Austin.
Legend & Data Sources
Rental Yield: Annualized median 3 bedroom rent, from the last 6 months, divided by the median 3 bedroom listing price, from the last 6 months. (Source: Awning analysis of Austin MLS data)
Median Listing Price, 3 Bedroom: Median 3 bedroom listing price, from the last 6 months. (Source: Awning analysis of Austin MLS data)
Median Rent, 3 Bedroom: Annualized median 3 bedroom rent, from the last 6 months. (Source: Awning analysis of Austin MLS data)
Population: Number of individuals living in the zip code. (Source: US Census)
Median Household Income: Median household income of the zip code. (Source: US Bureau of Labor Statistics)
Projected Population Growth: Expected population growth of the zip code over the next 5 years. (Source: US Census)
Projected Income Growth: Expected household income growth of the zip code over the next 5 years. (Source: US Bureau of Labor Statistics)
About Awning: Real Estate Investing Powered by Data & Local Expertise
Awning.com is a brokerage website and platform that helps individuals find, buy, and manage the best single family rental homes on the market. Awning provides this service by analyzing every listing on the market to surface the best investment opportunities at any point in time and pairing its customers with expert real estate agents, known as Awning Advisors, who help customers through the process of identifying the best strategy & markets for them.
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