Austin remains the country’s fastest-growing major region for the past 10 years as its population increases by 180 every single day, says the San Francisco Chronicle. The region offers more space than California cities such as San Francisco, and the subsequent benefits of less density—more affordable homes, cheaper childcare, an abundance of outdoor space—draws Californians in, fueling the ever-growing population. Some experts say that much of Austin’s growth can be attributed to Californians and Bay Area tech companies such as Apple, Facebook, Google, and Tesla that have begun to hire in Austin.
Last year, a record 22,114 jobs were added from companies relocating and expanding in the region, including at least 5,000 from Tesla in its new mega-factory rising just east of Austin, according to the Austin Chamber of Commerce. Palantir co-founder Joe Lonsdale, podcast host Joe Rogan and Tesla CEO Elon Musk all made the California-to-Texas move during the pandemic. That’s a lot of newcomers looking for homes.
“If the house is pretty attractive, we might see anywhere from 30 to 50 offers, and the Californians tend to win because they understand this game a lot better than the Texans,” said Ray Shapley, the Rubbiccos’ real estate broker and an Austin native. More than half of his clients are now from California.
Prices of 20% to 25% over asking are common. Shapley knows a buyer who paid for a newly built house, never moved in and sold for a profit of more than $200,000.
Luxury home builder Toll Brothers, the developer building the Rubbiccos’ new home, has 36 lots to sell in Dripping Springs, a suburb just southwest of Austin, with prices starting in the low $800,000s. Shapley said such homes would have taken a while to sell before the pandemic. Today, there’s a waiting list of over 200 people, the company said.
“The pricing power of Austin, which is number one in the country, is driven by California, plain and simple,” Toll Brothers CEO Douglas Yearley said on an earnings call last month. “The phenomenon is fascinating. We’ve never seen migration like this.”