High Tech Firms Flock to Austin

In a report published today by Offices/Americas the JLL Company, a real estate project and development firm, stated that high tech firms are flocking to the Austin and Dallas area. The reasons given are not to us:  relatively low cost of living, well-educated millennial talent pool, a diversified employment talent base, and room to expand (at reasonable expense I should add).  The report covered the top 15 high tech firms in the land and Dallas came in 8th and Austin came in 7th.in growth.  When measured against being resilient to an economic contraction, Austin placed 3rd, and Dallas came in at 12.  The report stated that this trend is expected to continue and this fits in nicely without sources that I have examined this year.  In order to maintain this pace new buildings and those be retrofitted for high tech firms are adding amenities once considered luxury items.  These include items such as charging stations, helipads, boat launches, hike and bike paths, and the like.

 
What these means to us investors in Austin area residential real estate is that our rentals must be in a condition to attract these millennials that are moving here.  Start with the basics such as paint and floor coverings that are fresh, nice yards, garage openers, ceiling fans, irrigation systems, and modern kitchen appliances.  In the past I considered offering landscaping as a luxury item, but I (and you) may want to reconsider that option as millennials probably don’t like mowing lawns (do any of us really?).  In our area lawn mowing twice monthly is only needed about 9 months out of the year.  During the dormant months I have the lawn crew trim up the grass and do tree and shrub maintenance only once a month.  It is something to consider as it is a value added amenity and you can probably recoup the monthly cost and maybe even make a few extra dollars if it means that your rental will lease up faster than the completion.

 

Rick Ebert / 20/Sep /1

Austin Area adds 7,800 jobs in June

Wow!  According to an article in the Austin American Statesman, the metro area added 7,800 jobs in June of this year.  There are cities that don’t have that many inhabitants so I find the number quite impressive.  Texas in general and the Austin area in particular continue to have a robust economy.  Fueling this migration of jobs is the economic well-being of the state which touts no personal income tax, lots of room for expanding or starting a business, and a well-educated population in our major metro areas.  So you might say that Texas and the Austin area are “user friendly” when it comes to job growth.  Leading the charge in our area job growth in June was construction.  Not a surprise here as the businesses coming here have to have buildings in order to function.

Of the 7,800 new jobs, 1,200 were in construction which many consider to be the backbone of middle income wages.  Of course all this means that these wage earners have to spend their money somewhere and in turn this means that the service and hospitability sectors grow, which in turn creates more jobs for our area.  And so the economic wheel continues to churn for our area.  And all of this is good news for us investors or Austin area residential real estate.

Let the good times churn! 

Rick Ebert / Austin, Texas / 23 July 16

Austin is the Right Place!

Nationally apartment rents have risen 64% from 1960 to 2014 according to Apartment List.  They also state that income for the same period have risen only 19%.  Reportedly 37% of all households nationwide rent their domicile, the highest figure in decades and renters are struggling to pay rent.  Austin in contrast has a much different and a much better story.  In Austin almost 53% of the population is renters and it has been this way since I moved here in 1981.  Of course the numbers have fluctuated, but Austin has a high concentration of renters for decades.  Apartment List states that the average apartment rent is currently $1,092 and the average renter is making $4.262 a month.  In 1980 those figures were $761 and $30.227 respectfully.  So in Austin wages are keeping up with the increases in rent and this is good for us owners of local residential rentals.  According to Apartment List the reason for Austin’s success are strong employment growths, attractiveness of the city, and our good friends the millennials. One definition of a millennial is someone born from 1982 to the early 2,000’s.  The USA has a reported 83.1 million millennials in 2015. These folks like their freedom to move about and therefore a big contributing influence to the overall rental population and certainly within the Austin area.  I see them coming to Austin to take good high paying jobs and rent a house.  They are also renewing their leases more frequently than in the past.  In 1971 the typical renter was someone who just graduated from UT and didn’t want to leave and either rented an apartment, condo or a duplex – that has changed a lot.

So how is Austin stacking up to her sister cities?  Apartment List reports that Dallas has increased rents from $761 to $968 on the average since 1980 but the average wage for a Dallas renter actually decreased to $37,237 from $38.406 in 1980.  And Houston has fared even worse.  In 1980 the average rent was $807 and is currently averaging $940 a month.  The average wage for a Houston renter in 1980 was $42,225 and now is only $38.447.

Now is a great time to own Austin area residential rentals!

Rick Ebert / Austin, Texas / 12 July 16

Spring 2016 Realtor® Party magazine

In the spring 2016 Realtor® Party magazine there was an article stating that  the U.S. Census Bureau reports that rental housing accounts for “more” than 1/3 of the nation’s housing and that this trend has been strong during this last decade in part because of the number of folks that went to foreclosure and in part because of the recession.  Apparently a lot of would be homeowners also are spooked by the perceived risks of owning a home.  Another reason is that renting a home vs. owning a home gives one the mobility and financial flexibility they desire and also frees them from the maintenance responsibilities that with home ownership.

The article stated that in towns having a university that housing is often a premium and that demand is high making the conversion of single family homes into rentals is often an attractive investment.  Austin, San Marcus, and Georgetown are local examples of this claim.  On the flip side of the coin renting is often the only option for low income families.

Now that the recent recession is behind us renting has caused shortage of affordable housing nationwide and in the Austin area I must add.  This is good news if you own rent housing and not very good if you are a renter.  Putting pressure on the availability of affordable rent housing is the increasing number of short-term rentals that have been popping up nationwide.  These short-term rent houses obviously are not on the long-term rental market which adds to the shortage.

When you add to the equation that many would be first time homebuyers, folks in their mid-twenties – and mid-thirties are strapped with large student debt and find it tough to save for a down payment that moves upward with the increasing value of housing, it becomes apparent that there is a great need to provide them with a basic need:  a rent house.  And that is where you and I come into play.  As owners of residential real estate we are in a position to provide a well maintained rental that will bring us financial reward.

Rick Ebert/ Austin, Texas/ 8 July 16

Mike Gonzales Earns RMP Designation

Shown on the right is Mike Gonzales being awarded his RMP designation from Michael Ebert, RMP current president of the Austin Chapter of the National Association of Residential Property Managers.  We at Austin Landmark Property Services, Inc. are proud to have shared in Mike’s achievement as we have seen him work diligently through the years to obtain his RMP designation.  The course of study and work includes 200 unit hours of continuous property management experience over 2 years (Mike is way beyond that point), eighteen hours of course work study, provide service to the local NARPM chapter and or to national, and attend state, regional, or national NARPM conferences.  Mike has been very active in NARPM and will serve as next year’s Austin Chapter President.

Again, congratulations Mike Gonzales!

Rick Ebert | Austin, TX | 24 June 16

rmp

5,000 new Austin Jobs in May 2016

As reported in the Austin American Statesman, Austin added a whopping 5,000 new jobs in May.  The unemployment rate for this period was reported at 2.9%.  To back up this statistic I have seen “Help Wanted” signs every time I pull into a shopping center and park in front of a business.  Add it looks as if this trend is going to continue in the near future.  A recent study of local businesses stated showed that 25% of those surveyed plan to add more staff in the third quarter of 2016.  On the flip side, a study by the Bureau of Labor Statistics showed that Austin trails in wages, and that the middle class type of jobs is losing ground.  That means to me that although you can have a job in Austin that you may not be able to afford a house in Austin.  This is a thread that we at the Austin Board of Realtors® have been tracking for about 2 years.  There is no solution in sight.  This means that for us investors in Austin area residential real estate that we have a product that is in demand; and that demand will seem to keep growing for the foreseeable future.  Even with these affordable housing issues the Austin area is still below the national average when it comes to both owning and renting a house.  Many of these new immigrants to Texas are coming from California’s tech cities such as my former hometown of San Jose which has a house average hovering around $900,000 on average.  A 2 bedroom 1 bath home of 832 square feet recently sold for $650,000 which is well below the average price for a 3 bedroom 2 bath home in Austin.  The average price for a home selling through the Austin MLS system in April was $278,000.  And for this reason alone a lot folks in California are eager to move to Austin.

 

Rick Ebert / Austin, Texas / 17 June 16

Congratulations to Pam Fite and to Shelly Longoria

Pam Fite became a licensed Texas REALTOR® in December, 2015. She recently completed the requirements to earn the Texas REALTOR® Leasing Specialist certification (TRLS) from the Texas Association of REALTORS®. The course of study consisted of four, three hour classes in leasing techniques, agency, and marketing.

Shelly Longoria recently completed a six month course of study in the Texas REALTORS® Leadership Program. This in depth program has the mission to educate and develop future leaders in our industry.

We are proud to count both Pam and Shelly as long-time valued employees and salute their commitment to bring the highest values that our industry has to offer to our company.

Rick Ebert/ Austin, Texas/ 10 June 16

Pam TRLSGraduation pic

 

Indeed to add 1,000 jobs to Austin + More

Indeed Hiring:

Yesterday local TV station KVUE aired a report stating that online job posting firm “Indeed” is moving into new their new 220,000 square foot office in north Austin.  Currently Indeed is located downtown and employs 500.  An interview with Indeed spokesperson Chris Hyams stated that they like Austin because of their tie in with the University of Texas as they hire many graduates.  How sweet is that!  He also stated that 50% of all job searches for Austin come from people living outside of Texas.

Seems that everyone wants to live here, and that is good news for us investors of local area residential real estate.  Except for the traffic – that’s the bad news!

More:

As reported in the June edition of the Austin REALTOR® the 2015 unemployment rent in Travis County was only 3.15% – that is good news.  The article went on to state that the majority of jobs created in the last “10” years did not pay enough to meet a family’s basic needs – that is bad news.  The article however was silent about the jobs being created today and in recent years and what they pay.  I suspect that these most recently created jobs pay well or people wouldn’t be flocking to our area to live in a tent!  However our area is seeing escalating home prices and many homes within the city limits of Austin are getting out of the reach of many because the amount needed for a down payment keeps going up and is a hard number to catch.  So as property owners of residential rentals we are filling one of life’s basic needs, shelter.  As home prices continue to increase so should the rents, and so should our bottom line.

Rick Ebert / Austin, Texas / 1 June 16

UPS Distribution Center Coming to Round Rock

This week various news sources state that United Parcel Service will build a 225,000 square foot distribution center on 50 acres of land where IH-35 and SH-45 meet. The facility should be up and running by the end of 2018. It is expected that this new facility will add 300 new jobs that will have a pay in the range of $50,000.

This is good news for Round Rock for the new hires that will staff the facility. It is also good news for us investors of area wide residential real estate. All of the contractors, and suppliers associated with bringing the building up to operations have to live somewhere as will the 300 new hires in 2018.

Rick Ebert / Austin, Texas / 18 May 2016

Small Business is Big Business in Austin

According to a recent article in the Austin Business Journal Austin small businesses grew 9.7% between 2010 and 2013 beating Provo, Utah that posted 6.8% – that folks is a wide margin.  Austin small businesses accounted for over 35% of all jobs in 2012.  Entrepreneurship is welcomed in Austin because it is relatively easy to do business here.  There is a large educated labor pool, a can-do attitude, and folks making good money that want and will pay for goods and services. All these folks have to live in something and that is where you and I come into the picture by providing great housing rentals.  Don’t forget 150 people a day come into our area – check the traffic if you don’t believe me!

Rick Ebert/ Austin, Texas/ 3 May 16