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Demovictory9

(32,475 posts)
Fri Apr 26, 2024, 02:45 AM Apr 26

Plunging Home Prices, Fleeing Companies: Austin's Glow Is Fading

Plunging Home Prices, Fleeing Companies: Austin’s Glow Is Fading


(Bloomberg) -- Oracle Corp. is moving its headquarters out of the city. Tesla Inc. is pulling back after a rapid expansion. Almost a quarter of commercial office space is vacant, and nowhere in the country have residential real estate prices fallen further from their pandemic peak.

Austin, the cosmic cowboy paradise that became a Covid-era economic superstar as it lured Elon Musk and a host of California refugees with its low taxes and sunny weather, had become accustomed to a steady drumbeat of good news. But lately that’s changed. And on Tuesday, Larry Ellison announced that his software company will shift its headquarters from the Texas capital to Nashville, Tennessee. It was a brief marriage — Oracle only arrived in Austin in 2020 — but getting jilted is never easy

City Hall was as surprised as everyone else,” Mayor Kirk Watson said in a statement.

But maybe he shouldn’t have been so shocked. Austin has been going so strong for so long that the tide was bound to turn.

After a 12-year streak as the fastest growing large metro area in the US, Austin lost that slot in 2023. An office glut has pushed the vacancy rate 5 percentage points higher than the US average, according to data from Colliers. Home prices have dropped 18% from the pandemic highs seen in May 2022, the most among the 50 largest US metro areas, Redfin data show. Even so, the city ranks as one of the least affordable housing markets

https://www.msn.com/en-us/money/markets/plunging-home-prices-fleeing-companies-austin-s-glow-is-fading/ar-AA1nFgrS

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Sky Jewels

(7,149 posts)
1. I know young people who won't move there
Fri Apr 26, 2024, 03:17 AM
Apr 26

because although Austin a liberal oasis, it’s still in Abbott’s Texas. Many young women don’t want to endure a Handmaid’s Tale regime.

viva la

(3,321 posts)
2. And tech firms will have a hard time recruiting
Fri Apr 26, 2024, 05:45 AM
Apr 26

Young people in a state where basic medical care is limited by law.

Sky Jewels

(7,149 posts)
10. I know.
Fri Apr 26, 2024, 11:13 AM
Apr 26

I’m pointing out that the woman-hating atmosphere and laws in Texas are not helping Austin’s plight in general. Oracle isn’t the whole story here.

genxlib

(5,542 posts)
3. It should be a cautionary tail
Fri Apr 26, 2024, 05:56 AM
Apr 26

When you start a relationship as a mistress, the cheating bastard will keep looking even after making a "commitment" to you.

yardwork

(61,712 posts)
9. Agreed. Larry Ellison is deeply conservative.
Fri Apr 26, 2024, 11:11 AM
Apr 26

He's not moving his company because of politics, I assume.

hlthe2b

(102,381 posts)
5. Yes. Austin is intensely overpriced, but to not even discuss the issues with Texas politics for companies
Fri Apr 26, 2024, 06:19 AM
Apr 26

(and their employees)? Texas has become corporate unfriendly in nearly all ways except for lack of income tax.

And no, the increasingly regressive politics of Tennessee do not escape me but (apparently) are not a bother to Oracle... And Nashville has a similar overpriced housing issue. And the Tennessee legislature is increasingly trying to destroy any independence for Nashville and Memphis. Sheesh. It seems to me one bad move for another.

LeftInTX

(25,567 posts)
6. Nashville is closer to a major health-care hub to align with the software giant's ambitions in the industry.
Fri Apr 26, 2024, 06:40 AM
Apr 26

I know Humana is in Kentucky

NanaCat

(1,269 posts)
7. Don't know what's driving the individual companies away
Fri Apr 26, 2024, 10:28 AM
Apr 26

But Austin has a bunch of strikes against it. The housing market has been riding a bubble for a very long time that was due to burst.

The transportation situation is atrocious. The traffic there is as bad as LA, and the city can't do much to change that at this point.

Sure, there's no state income tax, but the property taxes alone often make other states' income+property taxes look like a bargain. Taxes and fees on obscure services are also rampant--and almost always grifter high. It ends up being as expensive to live in high-COLA Texas cities, tax-wise, as it is in places with state income taxes. And sometimes, it's more expensive. A lot more.

If that's not enough, now major corporations must be having a difficult time recruiting and retaining employees thanks to the Texas GQP war on women. No matter how liberal it claims to be, Austin is not exempt from abortion being effectively illegal in the state, you know.

Maybe that's not such a big deal at techbro companies like Oracle or Tesla...but it will be a big deal for the working wives of any Oracle or Tesla employees or potential recruits. Every woman with a brain is thinking, 'sure, we'd probably make enough for me to leave the state for an elective abortion, but what if I have a pregnancy that goes bung? What happens to me then?' And they do not like the answer they see playing out in the real world of emergency obstetrics in Texas.

That's going to cool recruiting and retaining the best workers, and not by a small amount. I think the big companies there are already hurting from that sexist policy, and the employment woes will only become worse as time goes on. Sooner or later, they will have to cut their losses and move to bluer lands, or risk falling behind to competitors in civilized states.

So it's not a surprise that Austin is starting to lose its luster.

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