The Great Austin Appeal

The Great Austin Appeal

David Lee runs his own YouTube and podcast channels on investing and this week, he interviewed Matt Holm who is the president of the Tesla Owners Club of Austin and the club’s vice president, Anuarbek Imanbaev. Anuarbek is a reformed oil and gas executive and he was instrumental in bringing Tesla Superchargers to the Central Asian nation of Kazakhstan.

The Texas-based club is a highly popular and active group with over 3000 Facebook members and more than 10,000 Twitter followers. The Tesla Owners Club of Austin not only promotes all-things Tesla but the club is a strong supporter of moving to cleaner, more sustainable energy.

The interview however took a focus on what made Tesla’s Technoking, Elon Musk, choose Austin as his base? Matt Holm and Anuarbek Imanbaev live in the Texan city and have careers in real estate and so, were able to share their insights on what Austin’s great appeal is.

Austin is currently a hot property market and earlier this month, Musk commented on the housing issue in Austin. Since the start of the pandemic, Austin’s real estate has been booming with top companies moving shop to Texas to avoid the high living costs and taxes in with California and New York. With Musk being vocal on his opinions regarding California, he has been a big influencer is driving the move to Texas.

Just this month, the Technoking was calling for people to consider moving to Texas to work for SpaceX. And last month, he said he wanted to build a new city called Starbase at SpaceX's launch facilities in Texas. Several of Musk's portfolio companies, including SpaceX, Tesla, The Boring Company, and Neuralink, all have job openings in Texas and Giga Texas is set to be a massive production factory near Austin.

Matt described Austin as being a city that was customer service and support-focused, more so than being associated with technology. But that’s been changing and the city has been creating about 6 million square feet of office space for tech firms as these companies start to move in. Both Apple and Google are building offices in downtown Austin for their software engineer teams.

Matt said, “What we’re seeing is a robust increase and I wouldn’t even go back six months. I’d go back to the middle of January. We have seen a 30%-40% increase in home values across Austin in an extremely short period of time.” Matt said.

Anuarbek also pointed out that Covid has played its part in it too. “Pre-covid Austin was a growing market like what Matt was saying. There’s a lot of tech light … Google has a presence, Apple — a lot of the major tech companies — but they were kind of like secondary roles like HR and all that. But after Covid, I think we’ve definitely seen a massive inflection point. I think the tip of the spear is definitely what Elon and Tesla is bringing to Austin.”

So, why Austin?

The two members of the Austin Tesla Club agreed that Austin has a lot to offer.

“I think it comes to quality of life, cost of real estate really up until now. I know Elon internally asked quite a few people within Tesla and his companies if you had to choose one place you could go to anywhere in the country to move, pick it. And Austin apparently won by a landslide as far as quality of life, cost of living. We have a vibrant city. We got a great music scene. We have a great art scene. We have a great tech hub here already that sort of created an infrastructure that now can kind of blossom and come to full fruition.”

The size of Austin is also appealing being big enough but not too big and it has a population of 2 million whereas the Los Angeles metro has about 15 million people.

Anuarbek said, “Texas as a state is amazingly business-friendly and the vibe in Austin is kind of similar to what people experience in LA or the Bay Area. So I think that’s what draws. It’s the livability. It is an amazing place to live, but why does Elon care to move most of Musk industries to Texas? I think it’s because of the friendly business environment.”