Austin, Salt Lake City Lead U.S. Metros in Job Creation

As reported in the “Daily Real Estate News” the Gallup Index cites both Austin and Salt Lake City as leading the country in 2014 in leading all cites in job creation. No one can argue that Salt Lake is a fine city with beautiful mountains and near great ski areas, and ski areas are a plus and a minus because where there are ski areas there is snow. Enough said about that so Austin is number one!

The reasons cited by Gallup is the technology sector bringing in lots of talented folks to take jobs that have been created because of the increase in technology firms in both cities. Also cited in the report is that salaries are more competitive in these cities and the cost of living is lower than average than other tech-hubs. The report also stated that these jobs in turn create additional jobs such as construction to meet housing demand. In turn all of these jobs create service related jobs to cater to the needs of all. And this is where we investors in residential rentals come into play. All of these folks, many of which are young marrieds, need a nice place to live and to start a family. It is a great time to be an Austin area owner of residential real estate.

Austin Planning & the Rise of a Livable City

This headline is the title of an article found in March-April “Austin REALTOR® a professional publication of the Austin Board of REALTORS®. The article tries to explain what is making Austin such a robust city by first exploring what has happened. It explains that Austin is growth is not because it has of any strategic geography advantage and not because of any specific industry. Instead Austin has grown because of its “vibe”. Yes, good vibrations are what got Austin “started” to get it where it is today. People came to Austin because of its laid back attitude, relatively good climate (exclude summer to get to perfect) and live music. And who likes live music the most, young people. And as the word spread, more and more young people came, many to UT and about the same number just to hang out. But over the years the young people with degrees started to outweigh the Margaretville types, and before you knew Austin is being billed as “Silicon Hills”. With the young high tech folks in place, and with turnover at Dell, AT&T, and IBM, a lot of young smart energy was taking root to start new business ventures. This talent pool coupled with affordable housing, and a tax friendly business environment started to drive growth to Austin meaning that more young talent was coming to town and that in turn meant more businesses and services were needed to meet demand. Before you knew it Google Fiber was in place, and big name players taking note of that started to move here even faster creating even more jobs. The article went on to state that the Austin workforce is younger and more talented than the national average. It quoted a statistic that the 2013 Austin population had 506,645 folks with a bachelor’s degree (the population in 2013 was 885,400).

So what does that mean for us real estate investors of local residential housing? It means that Austin is a robust area with a pool of young talented rental prospects. What the article didn’t state is that a lot, if not most, of this young highly paid talent are millennials and that many, if not most of them, will rent a nice place vs. buying one because they don’t want to be tied down to any one place and don’t want the responsibility of maintaining a property. So the population has in a sense come full circle. The folks moving here still are laid back Margaretville types in their heads but this new crop have good paying jobs and has money to spend on nice rent housing.