About Austin

Entrepreneur of the Week - Karin Howard - # Post5

I'm in love, just in love with this city, I told you in previous posts that it was love at first sight in the web of the city, this love only intensifies every day. This city has everything, spectacular nature, an excellent public and private education system, a good population of both Americans and Israelis, there is a fine cultural and music scene.
And mostly it has a lot of job opportunities, Austin has become a major tech city in the last two years, it's not yet New York or Silicon Valley but it's definitely similar to Denver Colorado or Seattle Washington and tech continues to flow here from every direction.
Google built a tower in downtown Austin, a meta-parent company of Facebook rented 33 floors in a tower in downtown, Tesla built the Giga Factory and moved its headquarters, Samsung invests $ 17 billion in a new plant in Taylor, Amazon builds in the domain area (our soldier level) and more and more.
In the last two years and due to the migration of tech (183 families a day) housing prices have soared - see the graph below, and this was a celebration of investors. In the last year and a half I have bought over 125 homes for clients who have purchased housing and investments (there are more contracts in Pending), with a turnover close to $ 75 million, and this was a real sensation, tough price wars, homes selling for hundreds of thousands of dollars above asking price, and my much work at Market to avoid price war.
This celebration has just ended. Two things happened that calmed the market, the property tax and the rise in interest rates.
Let's start with taxes: Austin does not have a state income tax, the taxes are collected through the property tax set once a year by the county appraiser and is not linked to the purchase sale but to the appraiser's valuation. The tax rate varies from 1.9% for areas in the city of Austin to 3.2% in the new neighborhoods in the suburbs - this is a very high percentage.
This year the district appraisers made an update and valued all the properties according to their market price, and this led to a jump in the tax value increase by tens and sometimes over 100%. Investment assets have no cap and taxes can go up every year depending on market value.
We have already talked about the interest rate, in the Cubid period, the interest rate was very low, I still remember that I bought investment assets with an interest rate of 2.99% and today we crossed the 6%.
Since property prices are high and start in the $ 350,000 range, and rents have not yet caught up, although it is rising here day by day, we are in a situation where the buyer understands that he is not buying for monthly cash flow but for future value increase. Some would say that this is speculation but as a graduate of Hebei (Silicon Valley) and someone who knows the tech world very closely, Austin is still very cheap compared to other tech cities and has more to go.
What do we see now? Now the market is down, I wrote yesterday about the falls in the markets, it does not miss the real estate market or the Austin market. And what do sophisticated investors do that have declines - buyers! There is a lot of talk on the air in our market, the optimists say the market will continue to rise, the pessimists say we will experience a downturn, but the simple truth is that we just do not know.
NAR
The United States Real Estate Agents Association expects a 9% drop in property prices across the United States. I think this assessment is true for Austin as well.
And we are still in a recession and inflation is high, and there will be declines in tech as well, recruitments have already stopped and layoffs have begun in the big companies, this will continue until inflation is halted. Austin's luck is that its economy does not rely on just one sector but on several also on the administration since it is the capital of Texas, there is a university here, it is a tourist city, there is of course the tech but there are also some of the best medical centers in the country.
So I would not be in a hurry to eulogize the city even with one sector snatching strong right now.
If you are considering moving within the United States, Austin is a great city to move to and as I said it is significantly cheaper than its sister tech cities. If you are considering buying for an investment and you are not looking to realize the profits tomorrow morning, I still recommend buying here and buying myself.
The post tomorrow will be a summary and it will lead to some insights I have gained in the extensive activity here.