The California Tech Exodus
It wasn’t so long ago that California experienced what some called the “tech-exodus.” Several of the state’s largest technology companies, including Amazon, Google, Apple, Oracle, and Tesla, left the beaches behind and moved their headquarters east to Texas, Nevada, and Florida.
Source: Reddit
Essentially, these companies realized that other states offered a lower cost of living for their employees, far lower taxes, and generally fewer regulations regarding how they could run their operations.
Austin Is the New San Francisco
When they left California, Google, Amazon, and Apple expanded their existing offices in Austin, Texas, while Tesla and Oracle chose Austin as their new headquarters. In other words, Austin became the new San Francisco.
Source: iStock
These mega-companies brought thousands of their employees to Austin with them, and, of course, they needed somewhere to live. Because of the resulting housing shortage in Austin, house prices skyrocketed for both the California migrants and the long-term Austin residents.
Austin Responded by Building Brand New Apartments
To combat the housing shortage and high-priced homes, the apartment industry exploded, hoping to capitalize on the new and old residents who needed a place to live. By the end of 2023, over 10,000 new apartments had been constructed and were ready for their first tenants.
Source: Freepik
However, by that time, the California migration to Austin had slowed significantly. Now, there are more apartments than the city needs and rental rates have actually decreased by 7.4% since this time last year.
Oracle Announced It Is Leaving Austin
Now, just four years after Oracle moved its headquarters to Austin, the tech giant announced it’s moving again, and it’s taking its more than 4,200 employees with it.
Source: iStock
While Oracle prepares to abandon Texas for Nashville, Tennessee, Tesla made its own announcement: It will be laying off more than 2,700 employees from its Austin headquarters.
California Techies Are Now Trying to Sell Their Austin Homes
Even if a few of the soon-to-be-former Tesla employees and Oracle employees who chose to stay behind will stay in Austin, the majority will likely be leaving the city just a few years after they bought their homes and settled in.
Source: Freepik
But the housing bubble has since burst, and now, their houses aren’t worth even close to what they paid for them. One Austin woman posted a video on TikTok saying, “This is what you get.”
Austin TikToker Has No Sympathy for California Techies
TikTok user @gasstationnachos_ (Dani) posted a video on April 24, 2024, sharing her feelings about the tech movement to and then out of Austin and, more specifically, its effects on the local housing market.
Source: @gasstationnachos_/TikTok
Dani explained, “Austin real estate right now is **** cooked! The [California tech migrants] tried to take advantage of us. They said, ‘Oh, your houses are really cheap here; let me sell my house and come here and buy multiple houses… use them as Airbnbs, rent them out to people, flip them, sell them.’”
Things Didn’t Go Well for New Austin Residents
But Dani continued to explain why things didn’t work out for these new residents. She noted that many of them are moving with their tech companies, and others simply don’t like Austin as much as they thought they would. Dani says anyone not from Texas likely did not get a warm welcome in the city, so she’s not surprised they want to leave.
Source: Freepik
She explained that people who bought multiple properties to rent or Airbnb are struggling because their mortgages are so high; their costs are astronomical, especially compared to what they can get from renters.
Austin Cracked Down on Airbnb Rentals
Meanwhile, as rent prices decreased, Austin also cracked down on Airbnb rentals. In July 2023, the city reported that there were around 11,000 short-term rentals in Austin, but only 1,875 were licensed.
Source: Depositphotos
Therefore, the city council passed a resolution to ensure all those renting through Airbnb obtained a license to continue doing so, which meant that many homeowners had to stop using the online rental platform until they were legally allowed to.
No One Will Get as Much as They Paid for Their Austin Properties
Because property owners can’t rent their homes for as much money as they need to pay their mortgages and many can’t rent through Airbnb, Dani said, “Now, they’re trying to sell [these] houses… and they’re delusional.”
Source: Freepik
As with any homeowner, they want to get at least the price they paid for it, but according to Dani, at this point, that would be impossible.
Austin Residents Say They Deserve the Situation They’re in for Taking Advantage of the City
Finally, Dani said, “This is what you get for trying to take advantage of people who are just trying to buy in their city or their state that they’ve lived in their whole life.”
Source: @gasstationnachos_/TikTok
And the majority of TikTok users agreed with her. One wrote, “Good, I am a 3rd generation Austinite that was priced out. I look forward to the market correction.”
Be Careful When Buying a Home in an “Up and Coming” City
What’s frustrating for new and old Austin residents is that even those who purchased only one home for themselves and their families over the past few years will lose money if they need to sell now.
Source: Adobe Stock
More than anything, this story is a lesson to all people who move to an “up and coming” city; the housing market is extremely fickle, and if prices are high, they won’t stay that way forever. So, it’s crucial to understand the ebbs and flows of that market before making a decision you’ll regret.