Economist Mark Dotzour says Austin's cheap real estate, relatively speaking, and skilled workforce keep it an attractive place for technology companies. Those factors and the University of Texas have long been the city's magnet for luring technology companies to the banks of the Colorado River.

Austin's real estate prices, which has risen dramatically in recent years, are still dramatically lower than those in Silicon Valley, Dotzour says. Homes in west Austin sell for $160 per sf to $260 per sf, he says, while new homes in the San Jose, CA-area go for $300 per sf to $500 per sf.

In office rates, Austin looks good compared to competitors such as Silicon Valley and other areas, Dotzour says. He says Austin rates range from $30 per sf to $35 per sf while rates are $74 per sf in San Francisco, $68 per sf in San Jose and $46 per sf in Boston. When he presented those numbers to an Austin Real Estate Council meeting in July, he included the Raleigh-Durham, NC area's $21 per sf rates. He joked then that Austin developers might want to leave the Raleigh-Durham figure off the list if they send it to prospects around the country.