AUSTIN, Texas — Austin’s housing market was already booming, but now that Tesla announced it’s moving its headquarters to Texas's capital city, real estate experts say the demand for homes is just going to continue increasing.
In a press release Friday, Redfin, a real-estate brokerage, said a “premium on living close to Tesla HQ” will likely occur.
Founder and CEO Elon Musk announced that Tesla is moving its headquarters to Austin on Thursday during a shareholders meeting. Tesla is already building a Gigafactory in Travis County.
Home prices near Tesla’s Gigafactory are up 45% from 2020 and 10% higher than the rest of the Austin-Round Rock metropolitan area, according to Daryl Fairweather, chief economist at Redfin.
“I don’t think this is the end of it,” Fairweather said. “I think Austin is going to continue to grow and continue to attract these very high-earning workers, which will continue to drive up the demand for homes.”
Fairweather said Austin properties are more affordable than homes in the Bay Area, where Tesla’s HQ is currently located. But, she said Austin’s growth, including the addition of Tesla, is “a double-edged sword.”
“Unfortunately, a lot of local Texas or Austin residents are being priced out and having to look further and further out to neighboring areas, far-flung suburbs or even rural areas to find an affordable home,” Fairweather said. “I think Austin is really going to have a challenge moving forward in terms of its infrastructure, making sure that it doesn’t become a big sprawling city like Los Angeles.”
Any time an employer moves its headquarters, Fairweather said it drives up home values. In the release, Redfin said it is unlikely another 40% or more jump in home values will occur again but expects Austin to “top our lists for migration and price growth" over the next 10 years.
“I think it is kind of a negative sign that maybe California won’t be leading the pack in terms of the hottest housing markets moving forward,” Fairweather said. “That crown could belong to Austin for the next decade.”
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