Austin is now home to the Dell Medical School a teaching hospital that has replaced the old Brackenridge Hospital. This development has caught the eye of Merck a giant in the world of pharmaceuticals and who now plans to develop an innovative technology center in our fair city with an investment of over $29 million in sticks and bricks near the hospital. This will also create over 600 new jobs with an average pay over $85,000 a year. A Merck spokesman stated that their presence will likely spur an innovative zone drawing similar businesses to the area and assumingly with similar pay.
This is great news for us investors having Austin area residential rentals. Yes most of these folks drawing that kind of pay will probably become homeowners. But many of them will rent first and buy later. Also, each firm will have others on staff that won’t be drawing that kind of pay and who will be renters. And of course there are always ancillary services needed by these companies and they too will have persons who need to have a place to live. And that folks is where we come into the picture.
Paul Hilgers, CEO of the Austin Board of REALTORS spoke at a luncheon this week and stated (and this is about right) that the average rent in Austin has increased about 40% over the last 7 years. The average wage in Austin has increased about 4% of the same time. The point, regardless of the figures, is that it is becoming exceedingly difficult for people to buy a home in the Austin area because of the increase in home prices which in turn means a larger down payment. It is becoming difficult to save for the down payment because that figure has been moving upward. So this means that leasing a home is becoming the option of necessity if not by choice.
Rick Ebert/Austin, Texas/20 July 17