NWA. The Next Austin?

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For the past decade, coastal metros like New York and San Francisco dominated the landscape for the upwardly mobile, but the main story became how to cope with the high cost of living in those cities. One solution was to move into lower-cost neighborhoods, further pushing up rents and home prices. Others moved to lower-cost metros that shared some of the characteristics of those high-cost places; Austin, Texas, was one of the biggest beneficiaries of that trend.

Thanks to the accumulated impact of all that migration — accelerated by lifestyle changes during the pandemic — Austin is no longer affordable, and arguably overpriced for what it offers. That begs the question: Where should someone who’s been priced out of Austin look? I would argue the best candidate to be the next Austin is the up-and-coming region known as Northwest Arkansas.

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The underlying driver in all this is that a lot of second-tier metro areas got a lot more expensive over the past two years and aren't the bargains they used to be. New places will gain traction as metros like Austin and Boise struggle with their own affordability problems. At the same time, the continued growth in Texas will slowly but surely create its own spillover dynamics to other metro areas, just as growth on the West Coast spilled over to Austin.

Northwest Arkansas might not be on the radar of many coastal people. but it's the most likely candidate to be the prime beneficiary of these trends.

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