Austin’s once hot housing market is in sharp decline with landlords reportedly offering tenants perks like weeks of free rent to entice them to stay.
Home prices and apartment rents in Austin have seen a steeper drop recently than any other place in the country as the city sees slower jobs and population growth, The Wall Street Journal reported.
Several years ago, the city saw a glut of new apartment buildings get built while Austin’s economy grew at close to double the national rate, turning it into the country’s 10th-largest city, the paper reported.
Companies like Tesla and Oracle established offices in Austin, attracted by lower taxes and fewer regulations. This caused a rush of remote tech workers, who brought their six-figure salaries with them.
From 2020 to the spring of 2022, Austin’s housing prices spiked over 60%.
Now however, Austin’s population boom is waning, and prices are dropping.
Housing prices in the city have fallen more than 11% since their peak two years ago, according to the Freddie Mac House Price Index. The average value of a home in Austin is now $533,719, according to Zillow.
Rents are also down nearly 7% over the last year, according to Apartment List. The median rent in Austin is currently $1,472.
Meanwhile, offices are starting to empty out.
Google has not moved in hundreds of workers who were supposed to work out of a 35-story building built about two years ago.
Several companies have already moved out of Austin.
In 2021, Elon Musk dramatically moved Tesla’s headquarters to Austin. Last year in February, Musk announced that the electric car company would be moving back to California in a joint press conference with California Governor Gavin Newsom.
Another tech company, Cart, announced in November that it was moving its headquarters back to Houston after moving to Austin in 2021.
Venture funding in Austin has plummeted as well. In the first three quarters of 2023, venture funding was down 46% to $2.9 billion compared to the $5.3 billion Austin saw during the first three quarters of 2021, according to TechCrunch.
Meanwhile, nationally, home prices are still rising. Prices were up 4.2% year over year as of February, according to Zillow.
In many areas, concerns are still mount about soaring house prices, rents, and mortgage rates, which have driven home ownership out of reach for many families.
Prices for everyday items such as groceries also remain high due to spiking inflation over the last several years, compounding the troubles for families who may be struggling to pay their rent or mortgage.