Business is booming in the capital city. Austin has the fastest-growing US job market, according to the US Bureau of Labor and Statistics. It was also ranked the #2 hottest job market in the country for 2021 by the Wall Street Journal and #3 in the nation for job growth, according to the Austin Chamber of Commerce.
The list of companies opening locations in Austin is a veritable who’s-who of tech giants and the city is poised to continue its impressive growth. If you are interested in joining the masses relocating to Austin, here is a breakdown of the Austin job market and what you can expect.
Top Companies Moving to Austin
The Austin Chamber reported that 72 companies have relocated to the Austin MSA in 2021, creating nearly 7,800 new jobs. A further 87 companies expanded their Austin area operations, which created another 13,200 jobs to bolster the already stellar job market.
Previously, from 2016 to 2020, the Austin MSA saw the arrival of 236 new companies and the expansion of a further 325 companies, adding more than 74,000 new jobs to the market. Some of the top employers who have moved major operations to Austin in the last four years include Tesla, Amazon, Apple, Oracle Corporation, and Charles Schwab.
Tech giant Tesla broke ground on its massive new Gigafactory in July of 2020, which is pledged to create 5,000 local jobs. CEO Elon Musk also announced in October 2021 that the company’s headquarters will be relocating from Palo Alto, California to Austin. It is unclear yet how many jobs this will create, but it will undoubtedly have a positive effect on the local job market.
Amazon opened its first Austin location in 2015, and is now one of the largest employers in the Austin MSA, with more than 11,000 employees. It has also indirectly created an estimated 27,000 local jobs, from construction to food services and healthcare.
The king of online retail, Amazon ranks fifth on the Austin Business Journal’s list of the largest private-sector job employers. The company plans further expansions in 2022, with a Pflugerville fulfillment center that will create another 1000 local jobs.
Apple has had a presence in Austin for more than 25 years and currently has around 7,000 employees. In 2019, Apple broke ground on a new campus in Austin, part of which will be used to produce the new Mac Pro. The 3 million square foot site will initially provide 5,000 jobs but was designed with the capacity to expand to 15,000 jobs and is scheduled to open in 2022.
Oracle, the second-largest software company in the world, opened its first corporate campus in Austin in 2018 and employs approximately 2,500 people. In 2020, Oracle announced it was moving its headquarters from Silicon Valley to the Capital City.
Financial services industry leader Charles Schwab also opened its main Austin campus in 2018 and currently has around 2,750 employees. In September 2021, the company announced it will be expanding in Austin, which will create a further 450 local jobs.
What’s Fueling Austin’s Job Market?
Despite a worldwide pandemic and subsequent recession in 2020, Austin’s job market has remained remarkably strong and late 2021 reports show that the city has largely recovered from the economic downturn. The current unemployment rate for Austin sits at just 3.8%, much lower than the 5.3% national average.
Austin owes its job stability to a number of factors, including the astronomical growth the city has experienced in recent years, as well as the stable nature of its main industry sectors.
Like flies to honey, tech companies and major corporations are finding Austin irresistible, and with good reason. Austin has a lot to offer, both economically and talent-wise.
The cost of doing business in Austin is far less than those of other major metropolitan areas on the West and East coasts. With no personal or corporate income tax and lower real estate and utility costs, businesses can count on lowering their overall overhead.
The lower cost of living and famous quality of life their employees will enjoy while living in Austin is also a factor. Labor costs in Austin are lower and employees are happier and more inclined to stay.
The Austin Business Journal reported that businesses relocating from California to Austin can save an average of 20% overall.
A Deep Talent Pool
Companies are also attracted to Austin to take advantage of its excellent talent pool. Austin, which ranked 12th in the world on the JLL Top 20 Talent Hot Spots list, is a great place to recruit young, educated employees, especially those in the tech sector.
The median age of Austin residents is just 33, and more than half of Austin’s population has a bachelor’s degree or higher. Austin’s tech talent labor pool, which grew more than 12% from 2013 to 2018, makes up around 7% of its total labor force.
In addition to the soaring growth that the Austin market has seen, it is sustained by the evergreen nature of the industries that provide the majority of the city’s employment opportunities. These industry sectors were able to weather the recent economic storms because they provide vital services which are always in demand.
The sector that employs the greatest number of people is that of professional and business services, which encompasses technology, accounting, legal, advertising, and similar jobs. This is thanks in part to Austin’s wide array of tech companies.
Austin is the capital city of Texas, and the many government institutions that call it home provide 11% of local jobs, at city, county, state, and federal levels. It is also home to the University of Texas at Austin plus 26 other colleges and universities and a booming healthcare industry to support the rapid population growth.
Together, these three sectors account for nearly half of Austin’s total employment.
Data provided by The Texas Department of Labor and Statistics
Austin as a Tech Hub
Austin has had its own “Silicon Hills” since the 1980s, but the thriving city has recently hit its tech stride and some are now suggesting it could one day replace Silicon Valley as the home of America’s tech innovation. While Austin is still far from the output seen by Silicon Valley, its tech presence is undeniable. Some of the top tech companies that have campuses or headquarters in Austin include:
In addition to the presence of tech juggernauts, Austin has also been the birthplace of a large number of tech startups, the most famous and successful of which is Dell. It was ranked the best place in America for starting a business and second best city in the US to start a small business.
Austin’s tech success can be traced back to three main factors; a history of innovation, a beneficial financial climate for businesses and employees, and a culture that values uniqueness and fresh thinking.
History of Innovation
Austin has a storied history as a home for tech innovation. Tracor (defense electronics) and IBM opened local facilities in the 1960s, soon followed by Texas Instruments and Motorola in the 1970s.
The 1980s saw another tech boom, with the opening of the Microelectronics and Computer Consortium (MCC), homegrown tech giant Dell, and others. Apple and Samsung have had a presence in the city since the 1990s.
As discussed previously, the relatively low cost of doing business and lower cost of living have made Austin very attractive to both tech companies and the people they employ.
Of the 265 tech companies that have chosen to leave California, nearly half selected Texas as their new home, and most settled in the Austin area, thanks to its lower taxes and a less stringent regulatory climate.
Austin also boasts an average weekly pay that is 10% higher than the national average, helping it to attract even more young professionals to the tech talent pool that in turn entices even more tech companies to the area.
Most people know that Austin’s long-time motto has been “Keep Austin Weird,” and it’s that dedication to the quirky and avant-garde that makes Austin a perfect place for tech to thrive.
In a city that values innovation and creativity over stalwart tradition, fresh-thinkers can find plenty of support and willing participants. Austin even has an official “Innovation Office” designed to foster and encourage this environment throughout the city.
Top Growing Industries in Austin
With unchecked growth and evergreen industries, Austin has recouped all of the 2020 pandemic job losses and can now look to a future of more growth and prosperity. It ranks as the fourth best performing major job market over the last 12 months.
All of Austin’s private industries show a year-over-year percentage increase, with Leisure and Hospitality seeing the most increase at 22.4%, thanks to the lifting of social distancing mandates and the reopening of many of Austin’s world-famous music and entertainment venues.
Professional and business services, which includes tech and marketing jobs, came second at 11.4%. And, with forthcoming expansions by Apple, Tesla, Amazon, and Samsung, that number can only be expected to rise further.
Though numbers are looking good, a few industries, including Leisure and Hospitality and Education and Health Services, have not gotten back to the numbers they reported pre-pandemic. The market is expected to continue its upward trend though, and still has one of the best job markets in the country.
Data provided by The Texas Department of Labor and Statistics
The Job Market’s Impact on Real Estate
As the city grows by an estimated 168 people every day, Austin’s housing market is feeling the strain of meteoric growth. Record low housing inventory combined with record-high population increase has led to a housing shortage and ever-increasing property values.
The Austin Board of Realtors (ABOR) reports that the median sales price for homes in Austin-Round Rock MSA for September 2021 is $450,000, which is 28% higher than it was in September of 2020.
Further, the current market stats show that there is only 1.1 months of inventory available and the average days on market has shrunk by 22 days year-over-year to a speedy 17 days. By comparison, the Texas A&M real estate center states that a balanced market should have 6.5 months of inventory.
Due in part to the number of millennials who call Austin home and prefer renting over buying, the rental market has also seen a dramatic rise in prices. Rental prices have increased a staggering 93% over the last ten years.
But, despite the fact that both rental and sales prices are continuing to rise, Austin’s real estate prices still rank well below those on the coasts. As an example, housing prices in San Francisco are still 273.6% more than in Austin.
Considerations for Those Moving to Austin for Work
If you are moving to Austin for work, there are a few tips to help you make the most of your Lone Star experience.
* Get to know the city before you choose an area to call home. Each area has its own unique style and list of amenities. From easy access to lush parks to serene Hill Country settings to walking distance to live music venues, find one that fits your desired lifestyle.
* Consider moving outside the city to stretch your housing budget. There are some great communities around Austin, including Round Rock, Kyle, Pflugerville, Georgetown, Cedar Park and Hutto, where the housing prices are not as high as inside the city limits. These communities are charming and have easy access to all that Austin has to offer.
* Embrace the culture. Austin is a laid-back town that prides itself on being quirky and offbeat. While some of that shine has inevitably worn off with the massive influx of newcomers, Austinites still love to be a little out there.
Take it all in. Austin is made for exploring and offers a wealth of fun opportunities to its residents. The vibrant art scene, abundant outdoor spaces, and countless foodie venues are just begging to be experienced.
Whether you are relocating to Austin with your company, hoping to find new opportunities in the thriving job market, or just wanting to enjoy the famous Austin lifestyle, we would love to help you get settled.
Be sure to check out Living in Austin, Moving Tips and Local Secrets for more great tips on moving to Austin. To get started on your Austin home search, or talk to one of our real estate experts, visit us at homecity.com/austin.