The Emerging Trends in Real Estate 2020 forecast published by Price Waterhouse Coopers along with the Urban Land Institute recently ranked Austin at the top of the list for real estate prospects and investor demand in 2020. PWC and ULI identify Austin as a top-tier 18-hour city, which, according to Investopedia is “a secondary real estate market that offers services, amenities and job opportunities comparable to those in the big six markets but without operating on a 24-hour basis”. The Emerging Trends study notes Austin’s deep talent pool, ambitious commitment to business and real estate expansion, and its unique and popular lifestyle captured by its slogan (“Keep Austin Weird”) as important factors for our city’s growth.
The report ranks Austin as the No. 1 city for industrial investment in 2020 as well as the top ten for development projects and office, multifamily, retail, and residential investments. Investopedia sums up why investors find 18-hour cities like Austin attractive:
For real estate investors, 18-hour cities have emerged as a more affordable investment option than larger markets with higher prices that can compromise yields. These cities are attractive because they typically feature lower capitalization rate compression, meaning property values tend to remain stable rather than spiking up or down significantly. Like first-tier cities, however, 18-hour cities often boast low vacancy rates, along with favorable supply concentrations, rent growth, and absorption trends — all indicators of long-term real estate investment returns.
Austin offers a blend of opportunity and lifestyle that continues to attract companies and people looking to make a move to a new city. According to the Emerging Trends study, the Austin population is expected to grow by 2.2% each year for the next five years- around three times the average rate of the country. The current rate of population growth in Austin is around 45,000 people per year, around 123 people per day. According to a recent article published by the Austin Business Journal, real estate experts agree that the booming population, as well as international investments in the city, could help to make Austin recession-proof. Quite the claim and only time will tell.