This week we have an interesting set of factors to discuss that interact to really show the rising rental activity in the Austin Market.
As predicted, existing home sales are contracting a bit, with prices in the Austin -Round Rock - San Marcos region down about 2.5 percent for December. I don't see that as a cause for any particular concern. We've already discussed that the market for existing homes isn't really going to pick up until the opening months of 2012, so homeowners who can wait to put their property on the market are doing just that.
Condo prices, on the other hand, are inching up. Real estate investors can leverage this in a couple of ways. As an example, the W Austin Hotel & Residences downtown opened in December of last year. Units are going for about $580 a square foot, but if you're wanting upper floors, expect $1,000 a square foot. They have one current three-bed, three-bath listing for a cool $1.6 million.
There was a time when prospective buyers might have turned to a condo as a cheaper option. Those days are gone. Now, if you're in a position to invest that kind of money and then can turn around and rent prime units in a prime location . . . well . . . you're set. That's one side of the coin. The other is that if you have a nice duplex or single-family dwelling at a comfortable monthly price and a client who isn't quite ready to buy a home . . .well, marriage made in heaven.
And, I've talked myself blue in the face about the ripe potential of our growing local tech community. Now, we have the education firm TechSkills rounding up a $5.1 million funding package to expand their operations to train workers for info tech positions as well as jobs in the medical field.
One of the things that has concerned analysts as the recession has dragged on is the effect of long-term unemployment on worker skills. In many fields it doesn't take long to get rusty or just out of the loop entirely. As we see the economy coming back -- and it is coming back -- a lot of older workers will be re-tooling their skill set to qualify for positions in new fields. These are going to be people with families who are not interested in camping out in a two-bedroom apartment with six roomies.
There is absolutely no way that any of these factors -- separately and together -- don't scream rental, rental, rental. Now is the time to get the map out, look at the money you have on hand and what you can raise, and get in the real estate investment game. Not only is the rental income going to be steady in coming months, but many of those rentals will translate into sales in 2012 if that's what you have in mind for the property.
Posted by Monte Davis on
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