Downtown Austin Sees Unprecedented Growth
published on August 16, 2012
Austin’s downtown is undergoing a surge of growth as the city’s reputation for relaxed living and exciting nightlife lures young and seasoned professionals from across the country. Offices in and near downtown Austin are home to tech giants, political players, lawyers, and innovative businesses, attracting not only a geographically diverse work force, but a professionally diverse one. This surge of growth has led not just to growth in the downtown area, but also to neighborhoods and businesses that cater to working professionals who prefer to live in a stand-alone house. Neighborhoods close to the downtown area include Eanes ISD and Barton Creek.
Driving down almost any street in the downtown area will reveal new construction projects to meet the growing demand for urban housing, including 500 new apartments and condos, large hotels that include a new JW Marriott and a Hyatt Place Hotel, and at least two office towers. Other construction projects include new grocery stores, retail, and venue space.
According to Capitol Market Research, a local real estate consulting firm, the business district of downtown Austin has approximately 1,500 residential condominium units and an equal number of rentable properties. Currently, the occupancy rate of downtown is 97%, just shy of the citywide rate of 97.8%. Home sales also are seeing rapid growth as the city grows, but fall short of the rental market figures. “Renting can be less frightening than committing to a mortgage for some people who are new to the city,” said Austin Realtor Brian Talley, “but what’s really scary is the markup on rental units, creating a heyday for landlords. Home prices are rising in Austin, but not as fast as rental rates.”
Unfortunately for renters, the prices of downtown apartments average $1.10 a square foot, the highest rental rate in the state, and more than twice the city average. Lucky for downtown business owners, locals are not spending all of their money on rent. In the West Sixth Street bar district, some restaurants and watering holes generate up to $1,000 a square foot in annual sales, a figure typically seen in much larger cities. “Austin is a fun city,” Talley said, “and that’s why so many companies are setting up shop here, trying to attract the best minds in their fields. There’s lots of demand for skilled professionals, and being in Austin gives companies an edge over their competitors.”
Austin Home Price Estimate
What's your home worth? Use our instant home price estimator to get an idea of what your home might sell for on the market today.