Axios Austin

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Today's newsletter is 826 words — a 3.5-minute read.

1 big thing: Fewer home-flips as profit plummets

Data: ATTOM; Note: A flip is defined as any transaction between an unrelated buyer and seller within 12 months of a previous transaction; Chart: Axios Visuals

The Austin metro area saw one of the biggest dips in house-flipping profit margins last year, according to a recent report from real estate data company ATTOM.

Why it matters: Flipped houses made up roughly 7.4% of the home sales last year in the Austin metro which, like many Sun Belt areas, has been a hotbed for investors looking to profit off high housing demand.

  • The renovated homes can help stabilize neighborhoods but can also help fuel resident displacement.

By the numbers: Four Texas metros — Austin ($18,640 loss), Dallas ($14,817 profit), San Antonio ($12,289 profit) and Houston ($16,932 profit) — saw the weakest home-flip returns in the country among metros with a population of 1 million or more, according to ATTOM.

  • Austin home-flip profit margins were down from a 9% profit in 2022 to a 4.1% loss in 2023.
  • The largest increase in returns on investment for typical home flips came in Cincinnati (59.6% return in 2023), Cleveland (54.7%) and Honolulu (27%).

What they're saying: "With the significant changes that we have seen in the Austin-Round Rock-Georgetown housing market over the last two years — the music paused at a really inopportune time for flippers, especially those that purchased at the peak of the market," Austin Board of Realtors director Austin Stowell tells Axios.

Between the lines: We're past the house-flip peak of 2021 in Austin, but flipping rates are still up 67% from a decade ago, and 43% from five years ago, ATTOM data show.

The big picture: In 2023, house-flipping activity nationwide dropped 29.3%, the biggest annual decline since 2008, ATTOM found.

  • Return on investment, at 27.5%, hasn't been this bad since 2007. The ROI was down from 28.1% in 2022 and 35.7% in 2021.

Bullish on Austin

2. Coffee, but hold the beans

Illustration: Allie Carl/Axios

As Americans drink record-breaking amounts of coffee, one food startup is offering what it calls a sustainable "beanless espresso" in Austin.

Why it matters: Coffee farming is linked to deforestation, shipping beans creates carbon emissions and research suggests climate change could impact the global coffee supply.

What to expect: Instead of coffee beans, Seattle-based Atomo Coffee uses millet, guava, fructose, date seeds, ramon seeds, pea protein, baking soda, sunflower seeds, lemon and fenugreek to get a coffee-like flavor.

  • Some of those ingredients would otherwise become plant waste, according to Atomo.

Try it: Atomo's product is available in Austin's Madrone Coffee as of Monday.

Between the lines: The milk-based drinks that use Atomo's espresso alternative will cost extra, similar to the way other specialty sips, like mushroom coffees, have been sold.

  • Atomo's grounds sell for $20.99 per pound wholesale.
  • Each shop determines its own pricing, according to Atomo.

3. 🤠 The Roundup: Wrangling the news

Illustration: Brendan Lynch/Axios

🚔 A semitruck driver was arrested after allegedly damaging at least 10 parked cars in downtown. (KVUE)

🍺 The city is introducing a new initiative to raise awareness around drink spiking. Participating bars will offer kits to test a drink on the spot. (CBS Austin)

ğŸŽ¶ Nonprofit Home Street Music is using music to help people who have transitioned out of homelessness. (KXAN)

🍽️ The New York Times released a list of the 25 best restaurants in Austin, including Birdie's, Canje and barbecue spots like Micklethwait and InterStellar BBQ. (New York Times 🔒)

☕️ French restaurant Justine's Brasserie will open a sister restaurant at the Blanton Museum of Art in spring 2025. (The Austin Chronicle)

4. Our tech boom town

Illustration: Megan Robinson/Axios

Austin's tech workforce grew faster than any other metro area between 2019 and 2023, while New York City won the biggest share of relocating tech workers and the San Francisco Bay Area continued to dominate AI talent, per new data from VC firm SignalFire.

Why it matters: The U.S. is able to support a growing number of second-tier tech hubs, which also include Seattle and Boston, without undercutting the Bay Area, whose tech workforce continued to grow despite the extra competition and heavy layoffs in 2022 and 2023.

The big picture: Tech dominates the San Jose and San Francisco metro area workforces: Roughly 1 in 4 of all jobs, or about 730,000 jobs, are tech-related, according to data published by the Computing Technology Industry Association.

  • By comparison, Austin has around 180,000 tech jobs, making up roughly 14% of the workforce. That smaller base can make it easier to achieve a higher growth rate.
  • New York's over 549,000 tech jobs represent about 6% of its workforce.

State of play: Austin's VC-backed tech startups grew their workforces by 23% between 2019 and 2023, while the big tech firms grew their teams by 44%, per SignalFire.

  • NYC and Los Angeles' big tech workforces both grew by over 40% in the same period, with NYC winning roughly 1 of every 7 relocating workers in the last year.
  • More than a third (35%) of the country's AI and machine learning specialists are in the Bay Area.

What they're saying: "The bulk of these [employee] moves are remote worker relocations that do not align to their employer locations in all cases," SignalFire's Heather Doshay and Asher Bantock wrote in a blog post.

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Thanks to Chloe Gonzales for editing and Kate Sommers-Dawes and Yasmeen Altaji for copy editing this newsletter.

ğŸŽ¶ Asher is watching Meesha Shafi's "Hot Mango Chutney Sauce" music video and reading about its lyrics. (H/t Josh P.)

🍣 Nicole just had one of her favorite dinners ever at Musashino.