Austin Tx enjoyed one of the most stable during Great Recession and is one of the few metropolitan area where economy has been growing. http://alteredstatesofrea
Austin's real estate market is quite steady and is one of the least affected market on real estate bubble burst. Here are recent data from FHFA and NAR on Single Family Housing median price.
- FHFA Q4 2010 report, Austin housing appreciated by18.78, but down -1.05% over last 1 year. http://www.fhfa.gov/webfi
- NAR: 2008=188.6 Vs. Q42010=190.3. But down from Q32010=205.0 http://www.r
Having said that, at the peak of real estate boom at around 2007, approx. 20% Austin Tx real estate purchase was by the investors (mostly out of states like Californian). This has pushed up investment properties' value (say Duplex, Triplex and Fourplex) much higher compared to rental income. For example, in prime central Austin location, at the peak of market, gross rental yield is around 6-7% of purchase price (Cap rate of 4-5%). Since recent purchase of investment properties are primarily driven by cash-flow hungry experienced investors, you can get similar property at 10% gross yield or 8% in cap rate. Since mortgage rate is very low, you can enjoy very good cash flow (say 15-20% cash on cash return on 20% down payment).
As for the location of the investment, I would strongly prefer the so called central Austin In below MLS map, I would recommend Area 6, 7 DT, UT, 3, 1B and 4. My rationale is that 1) Austin is quite centralized --- key economic engine such as UT Austin, State Capital and culturally unique neighborhood are located in Central Austin, 2) Central Austin has strong restriction on new development (like rest of Texas, suburb are sprawling).
As you can see from above link regarding Austin economy, Austin Tx will be continuously one of the fastest growing metropolitan area in terms of GDP and population growth. Therefore , purchasing property in prime central Austin market, I believe, is great short- and long-term investment.