Austin Multifamily Investment Forecast
Tesla's Commitment to East Austin is a Microcosm of the Market's Evolution
East Austin epitomizes the larger story. Austin is one of only a handful of markets in the U.S. that recovered all of the jobs lost during the pandemic before the end of 2021 and has now entered a new growth phase. The leisure and hospitality sector remains impaired in the aftermath of the health crisis, but the trend of technology firms migrating in has accelerated, stimulating higher-wage job creation and bolstering demand for Class A and B rentals. The arrival of Tesla, a company that was publicly disgruntled by local policies in California, illustrates this movement and the allure of Austin. Tesla first established a Gigafactory in East Austin and later announced plans to relocate its headquarters to the market. The Chamber of Commerce estimates the firm was responsible for at least 5,000 jobs created in 2021, with plans to grow that count to 15,000 positions within the next few years. East Austin serves as an example of the broader market landscape; while the rental demand drivers are evident, an aggressive construction pace could pose some near-term hurdles. Austin's apartment inventory will grow by the second-fastest pace in the nation in 2022, with nearly 5,000 units headed for the East submarket.