Gotta Give

Austin’s tourism industry is booming. The secret is out about Austin’s incredible food, music, and outdoor vibes. With the Downtown Austin Alliance reporting 20.5 million visitors annually, and the Austin Visitor Center has moved to a larger space at East 4th Street to accommodate increasing tourist traffic.

Year round, visitors enjoy the unique experiences of local restaurants, bars, parks and trails, and the Capitol Building. The bats alone on Congress Avenue draw in 100,000 spectators annually, according to the City of Austin. Besides being the “Live Music Capital of the World”, this city is also growing as a top destination for conventions like SXSW (84,385 registered attendees). If these Austin experiences weren’t enough to secure the city as a national hotspot, events like the Formula 1 United States Grand Prix (237,406 attendees) and ESPN X Games (136,845 attendees) have attracted attention both domestically and internationally being globally broadcasted around the world in 215 countries.

Austin’s growing presence overseas is a large contributor to the millions of tourists each year as it tops nearly every published “Best Of” lists around the globe. The expansion of international airways is putting Austin on a global stage with an increasing number of direct international flights. Since the introduction of the first transatlantic flight to London Heathrow in 2014, the United Kingdom represents Austin’s largest market overseas.

Another crucial component of Austin’s tourism growth is attributed to conventions. Named “Top Meeting Destination in the U.S.” by the Professional Convention Management Association, up to 4,000 visitors come in for each convention. In 2012, there were 1,355 conventions serviced, booking 511,850 hotel room nights.

As a result of this, there are currently several real estate developments working to serve the needs of all these visitors. There are currently 7,400 hotel rooms downtown with an additional 2,072 rooms under construction. The recent opening of the JW Marriott and the Westin Downtown, coming in July, add an additional 1,378 rooms to that count, with 322 rooms coming to Hotel Van Zandt off Rainey Street opening in September.

Fortunately, this growing industry is benefiting our city immensely. Tourism brings in $6.2 billion and creates 50,100 jobs annually, states the City of Austin Marketing Plan. State and local taxes generated through tourism are estimated at $403 million yearly. It is no wonder that Austin has been ranked “#1 Economy in the Country” and “America’s #1 Fastest-Growing City.”

There is no doubt that the cat is out of the bag on Austin. We are a great place to live and seem to be on every top ten list for every conceivable reason. Time and again media outlets report over 140 people a day move to Austin. What does that actually mean and where are the “people” coming from?

After factoring in the number of people who leave Austin, the greater Austin metro area is growing by 110 people per day according to Ryan Robinson, Demographer with the City of Austin. Perhaps surprising to many, the majority come from right here in Texas, with the largest percentage of being residents of Williamson County moving to Travis County (19%).  “My sense has always been that Austin gets a lot of two-step migrants. First they move from New York to Houston or California to Dallas; then realize that  where they really want to be is in Austin,” says Robinson.

However 23% of newcomers do make Austin their first step and arrive directly from out of state. The lack of state income tax and Austin’s welcoming business environment, seems to have especially drawn the attention of many California based business owners and home buyers. In addition, we have noticed that the recent hard winters in the north have driven some buyers to our friendly climate.Census data from 2008-2012 confirms that some of our biggest out of state markets for transplants are California, Florida and New York. Gottesman Residential’s website data echos this with the majority of our 35,754 / annual out-of-state web visits coming from New York and California.

The Gottesman Residential website also reflects international interest, with views coming from 132 countries this year. While the international interest in Austin is widespread and Austin has been put on the global map with international events such as South by Southwest, The X Games, Formula One and Austin City Limits Festival, we have yet to see the large influx of luxury, international buyers as was originally anticipated.

According to Robinson, 11% of migrants to Austin in 2014 have come from outside of the United States, which significantly dropped from the 23% of migrants being from foreign countries between 2000-2010. Part of the reason for this may be the lack of ease in getting to Austin. While we now have an international airport, the number of direct flights available to Austin from other major cities is limited. Charles Heimsath, President of Capitol Market Research which specializes in real estate research, suggests that as Austin adds more direct flights, specifically international flights, we should anticipate seeing this demographic rise.

The next question is: What does this mean for Buyers and Sellers in the Austin real estate market? While Austin has small town roots, there is no doubt that it is now a fast paced real estate market whether growing from local population movement or new transplants to the state, and it is an exciting time to live in and own a home in Austin. “Just like all politics is local, all real estate is local. Whether buying or selling, local knowledge in the area is essential,” says Heimsath. Austin has continuously bucked national and state housing trends. Therefore, approaches to buying and selling in New York or Dallas for example, may not be effective in Austin. And relying on publicly available, online data alone, may not be sufficient. In–depth, local knowledge of our market and experienced guidance will be key for people looking to both buy and sell.