Though history may inevitably suggest that these three years were considered one of Austin’s “bust cycles”, and though things did slow down and tech jobs were lost (where weren’t they?), the city never actually saw a decrease in median real estate values. They slowed to a crawl for a couple of years, and rents definitely fell as newer rental inventory planned during the expansion was finished construction and came online. In addition, this was a period of remarkably low interest rates, which spurred many renters across the country to purchase property, putting further downward pressure on rental values.

The fact that Austin re-ignited its boom in 2004 is a tribute to the fact that Austin is insulated against many major market-shifting trends like bubbles (our equity tends to be national trends, yet not spike so swiftly that a fall will be inevitable), earthquakes and hurricanes (geographically impossible), and the dreadful problem for all investors – competing over supply of inventory, which we’ll discuss a bit later.