In 2013, as the city of San Marcos was recognized as the nation's fastest-growing city by the U.S. Census Bureau for the first time, journalist and entrepreneur Melissa Jewett knew a change was coming.
Central Texas earned a reputation as one of the fastest-growing hubs in the country throughout the mid-2010s as newcomers from near and far flocked and real estate prices soared. As the area began experiencing growing pains, Jewett saw an opportunity. She formed online news site San Marcos Corridor News to serve not just San Marcos, but nearly the entire I-35 corridor between Austin and San Antonio.
"I have been in San Marcos for 16 years and I have just watched tremendous growth... and so I just decided that we needed to tap into that audience," Jewett said. "I wanted something that could try to cover a regional area and not just a local area, even though that's what I started out thinking about. And during those eight months, it finally hit me upside the head that it's growing like crazy."
While San Marcos' Hays County exploded by over 50% to become the fastest-growing county in Texas from 2010-2020, Austin was heralded as a "boomtown" by new transplant Elon Musk and the thousands of techies that soon followed. The Texas capital city-turned Californian haven was the fastest-growing large metro in the country in 2020, according to the Census Bureau.
San Antonio is on the south end of the I-35 metro that could be. (Shutterstock)
Just an hour and a half south down a short, traffic-heavy I-35 strip lies San Antonio, a city whose growth isn't far behind its more hipster counterpart. San Antonio and nearby New Braunfels were once set apart by swaths of countryside; now, the two are nearly connected and are both earning spots on fast-growing lists.
With all of the past decade's expansion, some believe that Austin and San Antonio will one day merge into a metroplex that rivals Dallas-Fort Worth. Some, including Jewett and state demographer Lloyd Potter, say it's already happening.
Matthew McCafferty, a real estate developer with Brookfield Properties, said he remembers when Blanco Vista, their master-planned community in San Marcos, was one of the first in the area. Now, small subdivisions dot nearly the entire corridor. McCafferty said Austin bedroom town Buda has been nearly completely bought out by new developments, while New Braunfels currently has a massive 6,000-unit master-planned community in the works.
There are still some obstacles before the area becomes a metro with a catchy nickname—ASA (or Austintonio?). In their latest study published last month, Austin's Urban Land Institute discussed several needs, including better public transportation and high-density walkable neighborhoods, if Austin is to have sustainable growth and increase affordability.
ULI's Paulette Gibbins said that extends to I-35 corridor growth—the area's cities will need to emphasize "transit-oriented development" and vastly improve travel time between the two hubs before it can experience healthy growth.
McCafferty said a public rail system and money funneled from the U.S. infrastructure bill could help the two cities grow together.
"That's a heck of a drive in the morning (and) I think that that's the biggest constraint between the two cities," McCafferty said, referring to the hour and half drive between the city centers (without traffic).
But even with lightning-speed rail to connect the two cities, the region wouldn't be cohesive without "live, work and play" cities in between, Gibbins said.
"Having job opportunities so people can work near where they live, is also going to have a great effect on the (metro) overall because otherwise, you end up where it's really just a split between the two cities," Gibbins said. "The whole area needs to be utilized."
New Braunfels is bleeding into San Antonio as the area grows together. (Shutterstock)
That's where organizations like the Greater San Marcos Partnership come in. San Marcos residents tend to grit their teeth when their city is referred to as a commuter city for Austin or San Antonio, and Jewett said some officials are in denial about the area's imminent growth.
But San Marcos has become an economic powerhouse of its own—the partnership helped usher in a 1 million-square-foot Amazon warehouse in 2020, and the GSMP's Jason Giulietti said the area's job growth and labor force each grew by around 45% from 2008 to 2018. The city's resident 36,000-strong university, Texas State University, is also quickly developing into a tier-one research institution.
Some families already brave the commute between the two Central Texas hubs each morning—but as residents and companies get priced out of Austin and San Antonio city centers, they're turning to the in-betweener cities. According to ApartmentData.com's November Market Line Report, the San Marcos/Kyle/Buda area has been the hottest of Greater Austin's 11 submarkets over the last three months.
"If you think about as a large employer, choosing a site in San Marcos, Kyle or New Braunfels gives you the ability to pull from the Austin market as far as jobs and... the San Antonio market as well," McCafferty said. "I think that's going to become a lot more appealing."
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Austin homebuyers have been through the wringer in the past year—tales of offers well over asking price, sales in under an hour, and months-long supply chain shortages have become commonplace in the city's cutthroat housing market. So it's perhaps no surprise that many homebuyers are looking for greener pastures as they stake out large empty lots along the city's outskirts.
After casually searching for a home for years, Austin influencer and blogger Jane Ko experienced the pandemic housing surge firsthand when she found an empty lot near the airport in the summer of 2020. Stretched thin by high demand and limited supply, Austin's median home prices had already reached a then-record of $435,000 in August of that year, while new inventory grew by just 0.1% in that month.
Due to seemingly ever-increasing demand, Austin's homebuilding market has been busy—if not strained. New listings were up 6% in November 2021, while median home prices had cooled ever-so-slightly to $470,000. The area was ranked the fifth-busiest metro in the country for single-family homebuilding permits in August 2021, according to a National Association of Homebuilders report.
Austin influencer Jane Ko build a semi-custom home on an empty lot near Austin-Bergstrom International Airport. (Jane Ko/A Taste of Koko)
"I think for those of us that have been here, we've seen prices rise in the last five years and I kind of figured if I don't buy now, then I probably won't be able to," Ko said. "I kind of stumbled upon it and I think for a lot of people that's been really the only way to find real estate since the market is so hot."
Austin's inventory has remained somewhat low, especially in the center of town, leading some to believe that homebuyers are being "priced out" by the city's limited options. Area suburbs are reflecting that—the Kyle-Buda-San Marcos region saw 2,900 new home starts from September 2020-21, more than any other Austin submarket.
But with new developments working to keep pace with demand, 2021 Austin Board of Realtors President Susan Horton told Austonia the trend just reflects customer desires.
"I don't think that folks are being pushed by any means," Horton said. "Folks that want to buy out in the rural areas are buying for personal reasons and they're buying because they want the land and privacy. Folks really, truly want to be out. If you want a big lot, it's there."
Like many homebuyers during the pandemic, Ko was happy to scrap Austin's downtown for more space. Because she works from home, she said she and many of her friends are looking for bigger homes and bigger lots in hot areas like Dripping Springs.
Ko had the option of moving into already-built homes within the neighborhood but opted for a custom-built home instead—something that Horton said is another draw for prospective homebuyers.
Austin influencer Jane Ko remodeled her kitchen after building her semi-custom home. (Jane Ko/A Taste of Koko)
Ko's kitchen remodel took months due to supply chain delays/ (Jane Ko/A Taste of Koko)
"The desire to be away from the person next door is really most of the time the deciding factor," Horton said. "And then there are those that want to have a house simply because they want to design it themselves, and so those are the aspects that make buying that raw land and building a house really important."
But building a custom home has its drawbacks. Horton said construction loans, land surveying, zoning restrictions and road access are all hoops that can be jumped through with an experienced realtor.
But even through the tedious and stalled homebuilding process, Ko said it's been worth it to create a home made just for her.
"This is a place that I'm hopefully going to stay in for a very long time," Ko said. "And I think because I do a lot of entertaining at home and shoot photos at home, it's really important that my space looks the way I want it to."
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In earlier phases of the pandemic, people took it as the perfect moment to uproot their lives to the newest boomtown. Many, particularly Californians, found a fit with Austin, enjoying the Texas weather and lower cost of living. But for some, it may only be a pitstop.
Melaku Mihret, who works remotely in Austin for a Meta office in the Bay Area, thinks some of the Californians who have moved to Texas in the pandemic may just move here temporarily, save money and then head back. Others have also speculated a possible reverse migration, but it may be too early to tell.
According to the Kinder Institute at Rice University, Texan migration to California has remained steady for years. And when it comes to Californians leaving, the institute says it's less about a pull into Texas and more of a push out of California driven by home prices.
But they're not all staying in Austin. U-Haul data shows departures from Austin were up 18% even as one-way arrivals were up 22% in 2021.
Melaku Mihret, a remote worker a Meta office in the Bay Area, is now living in Austin. (Andrea Guzman)
For Mihret, the biggest driver behind his move was the squeeze of costs in Northern California. If the cost of living wasn’t an issue, Mihret said he’d live in the Bay Area. So if Austin continues to become less and less affordable, would Californians go back?
For Mihret, not many places come close to what California offers. He points to the nature, such as the mountains and lakes, in California and the massive tech hub it is. Austin is “not even nearly close to California,” Mihret said, after acknowledging Austin's growth as an emerging tech hub.
Meanwhile others like Ian Davies, who grew up in Austin and left in 2011 when he was in high school, much prefer living in Austin.
His family had moved to Philadelphia, years passed and he eventually landed a job in financial operations at NBC Universal in Los Angeles, California. When the option of remote work during the pandemic came around, he longed to return home.
“I couldn’t wait to move back to Austin,” Davies said. “Not that I didn’t enjoy my time in LA. But LA is just a whole other beast than Austin.”
Ian Davies does remote work for NBC Universal in Downtown Austin in early January. (Andrea Guzman)
But a downside he says is it's become more expensive in the past year and half since he returned. The Austin-Round Rock-Georgetown metro area had the 12th highest change in a recent study on cost of living increases across the country. And among the nation’s top 10 tech hubs, Austin saw the largest year-over-year increase in average rent this past September, with an average of $1,647.
It's a cost of a growing city. Davies sees a positive in all the growth, as he enjoys living in a city with a diverse population, like when he was in LA.
“There’s a group of Austinites who are very against people moving here, and I’m definitely not part of that crowd. I want to share this city with other people. I think it’s awesome.”
He says he wouldn’t want to be anywhere else.
“I hope that Austin can keep its soul and keep its weirdness. Like blues and rock and live music,” Davies said. “I haven’t seen much of that change. I hope people that move here can adapt the spirit of the past and carry that.”
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