Why Texas is Great: Economic Forecast 2012

Ashley Brinkman (Prudential Texas Realty) — Wed, 16 Nov 2011 03:11:29 -0800

I am no economist, however if you know me at all, you know I carry a spiral with me just about everywhere (I know it’s no iPad) and inside that trusty spiral are some notes. I take notes when on the phone, when I randomly think of something while driving (I mean while stopped at a red light of course), and for my infinite to do list…(aka Success list as a motivational speaker once told me it should be called). Anyway, without further a due, here are some notes on the Economic Forecast for 2012 meeting I attended a few weeks back, and the trends we have seen the past few years in Texas and Austin especially. Since I am such a list maker, a lot of this may be bulleted, please remember I went through a bunch of slides pretty fast with graphs and charts.

I know it isn’t the most exciting information in the world, but it sure is important!

Officially the Recession of 2007 has been declared over. Does it feel like it, perhaps not, but it is.
New home construction is what took us into the recession, but it will be what takes us out
Our economy won’t recover until the housing market recovers
Most election years are slow (this I can tell you from personal experience) then not necessarily based on who is elected, but what they promise to do will determine how the housing market will turn around

Hurdles for 2012:

Tepid growth in private sector
home prices declining
Government restrictions from falling revenues
Commercial Real Estate (RE) still dragging due to lending and regional banks
Uncertainty in the Gov. due to lack of confidence re: actions, regulations, taxes, national debts and deficits, global disruptions
Credit contractions for consumers and businesses
Confidence in RE increasing in value still down, consumers making lifestyle choices over investment opportunity

Reasons for Optimism!: Why I am happy to be a Texan

Tx job growth is double the National rate
Relentless population growth in Texas
Government budgets finally getting real
Pent up demand due to: retiring, moving to a new location, buying a house, relocating biz to Tx, expanding a business
Texas Recession was 2009: 2010 and 2011 have been recovery years
Texas is the fastest growing state 2000-2010 (21% increase)
Projected: 40yrs 13.9million people, 703k per yr (2000-2010)
Austin, Tx has increased 37% since 2000, 6.8% of Texas and projected at almost 50k ppl per year moving to Austin, TX
Texas is a young state: 27% of Texas is 18 and under, only less than 10% is 65+

Forecast Factors…a Closer look at Age:

Generation Y is much bigger than baby boomers
Generation i–> what they are calling the next group because they will have come into this world not knowing what it was like to not have internet (crazy, huh?!)
Baby Boomers: Home Ownership Grows (since the ’70s)

It was the “American Dream” for the Boomers
Last serious time of deflation of home owning: 1930′s
Loss equity in real estate
Because of Boomers Gen X and Gen Y have shifted attitudes due to seeing their parents lose value in their home
Since 2007 we see more people “doubling up” moving in together even after college, or back in with parents

Boomers Own–> Gen Y Rents

25-35 yr olds > 50% are already home owners
Took advantage of tax credits, interest rates, and timing in the market/opportunity

Austin, TX Breakdown:

Echo Boomers: Gen Y 16-34 (31.8%)
Baby Bust: Gen X 35-46 (17.6%)
Millenials: Gen i

Austin owner occupied units have become younger and foreclosures are declining
Because Tx is a non-judicial foreclosure state, we really are declining here compared to other states
550days!!!!!–> National average of days before foreclosures happen

A Closer Look: Households in #s:

In the 1960s–40% of people had 4ppl in a HH (household not happy hour)
In 2009–30% had 2 person and 31% had 1 person per HH
Also noted–married couple decline in HH types

Current Housing Issues:

Low demand and high supply=weaken home values (I really don’t see how this applies in Austin so much…rental market was tight due to influx of people, with more coming-where are we going to put them all??)
Gov stimulus efforts prolong market recovery (tax credits and mortgage workouts)
Lenders in Difficulty: Told to make loans, but are punished for making RE loans or CRE loans
Renting a more viable option to buying (only if you can’t qualify and it makes sense financially)
FHA essentially a sub prime lender

Overall Texas Housing Markets Info:

2010 sales decreased from 2009: The Good News?: After flattening we’ll increase
All metro areas in Tx after tax credit home sales went down
End of 2009 and beginning of 2010 we see an increase in sales due to the tax credit (these factors will always need to be examined closer when comparing year to year housing prices)
Homes sales haven’t increased, but employment has
National delinquency is much higher nationally
Foreclosures: 2Q2011: US: 4.43 TX:1.87

AUSTIN, TX:

Top 10 in US metro areas for healthy housing, in fact all 4 major markets in Tx are in the top 10, alongside North Carolina
2011 Home sales up in Austin (19k-21k)
Median price of homes: Up 2% from 2010, $192,800
Historically 4% increase
Rest of the US is down
“Flat is the new Up!” (referring to charts where our prices and values stay steady, because at least they aren’t declining!
Generally strong market due to Supply and Demand
Multi-family building permits up in June

In conclusion, I hope you took a little from those notes (I know they were somewhat overwhelming). I always think it is interesting to analyze numbers based on sales, housing prices, building permits and growth, alongside cultural changes. Generation Y shifting in attitudes, each generation becoming more entitled… more need for instant gratification and honestly, in my opinion, lacking financial self discipline and money smarts. With lending regulations being as tight as they are, I feel it is our responsibility to start informing and educating those younger than us the importance of paying on time, income to debt ratio and saving money, and that they don’t have to have the best of everything right now. Ok I will get off my soap box, because I am such a great parent and all…

So, really now, in conclusion Texas is doing great. Overall we will see steady until after the election of 2012. Rates will remain low for a while (not forever), Texas and local markets will continue to grow and make modest improvements and there will be some enthusiasm come Spring 2012. In Austin, due to tight lending regulations, while there have been some multi-family building permits approved, this doesn’t necessarily mean they are getting done. While there being an influx of young people moving here, they are more likely to be renters and studies have actually shown that more unemployed college kids move to Austin (live off parents and savings) because they hear how great Austin is (Great! More unemployed college kids stimulating the local Austin economy with their parents’ money, awesome!) Austin, known for its Technology sectors will still increasingly grow…a youthful city at that. Being there will be so many moving here from other places, I predict rental market to still be high, and decent places with desired location to still moved fast. If you have been paying the same amount in rent for the past two years…consider yourself lucky! I also predict (based on what I have seen and read) the same shift toward people “doubling down” and rooming together. I hope you found this Economic Forecast of 2012 interesting, rewarding and something to take home. Call me if you are ready to buy while the rates are low and the rents are high and as always, thanks for reading!

Ashley Brinkman/Realtor/Prudential Texas Realty/512.665.8787

Terrace at Shoal Creek: Affordable DT Condos, Get a bonus w/ Contract before Nov 31!!!*

Ashley Brinkman (Prudential Texas Realty) — Tue, 08 Nov 2011 02:37:15 -0800

Terrace at Shoal Creek were originally House Park Apt. but the developer (who has successfully developed many other Terrace projects, one just up the street at 1212 Castle Hill. 1101 Shoal Creek is the address and the floorplans are just fantastic--as well as the price.
Most (practically all) the units for sale are 2/1.5 bath and two story. I will be working at the model frequently (when finished) and this Sunday (hopefully) here is what it looks like just about finished up.

I mentioned a bonus in my title, huh? That's right. If you are interested and you put one under contract I get a bonus for representing you. If that happens, I will give you 20%!! If you refer someone who ends up buying I will give you a referral fee! Please email me for more information!

There are lots of great things about this project, that I would like to point out.
-Price! This location is in the 78701 and is one of the lowest price per square footage in the DT area, especially for something renovated like new. Pricing will start around $298k, with a low HOA of $265 a month including digital cable and internet, and of course outside maintenance and insurance, care for community area (which includes a grill and patio tables etc).

-No neighbors above or below! Since all units are two stories, you only have someone next door
-Two parking spaces. Parking has become quite a pain DT. Not only is there a parking garage across the street, street parking by the trail, but each unit will have one reserved covered spot and another spot open!

-Finish outs. If you have seen some of the other Terrace projects, than you will notice you are getting top of the line and modern-esque finishes! Concrete counter tops, extra added skylight in every unit, new frosted glass front doors, newly Saltillo tiled fireplace in living AND master, wood floors throughout, completely tiled bath. (Interested but want to change something before it is built?! Let me know, let's get you in early!)

-Large patios of East and West facing views! My preference is the model unit, it is on the end, with added windows, for light, facing West (I prefer sunsets to sunrises as I am not a morning person, but view overlooks the trail below and Lamar Businesses). Come by this weekend and check it out! We have open houses on a daily and weekend basis!

-Storage Space! Closet space in Master is female approved! It is huge, you can fit a dresser in there. Built in shelves for shoes, and plenty of rack space for hanging clothes. There is also a linen closet in the hallway to the bath. The guest room boasts built ins and a smaller closet, but this can also serve as an office space. A lot of condos nowadays lack a lot of practical space. There is an area for barstools in the living room-as the kitchen does open up to the living as well as a dining room. To see more photos, just visit my Facebook page!

-Location!! 12th and Lamar-so much near! Walk to Whole Foods, DT, Courthouse, the Capital, Whole Earth, Mel's Meals, 24 Diner, Waterloo Records, Bacon, The Tavern, Austin Land and Cattle, ACC Rio Grande Campus, Hem, and jump on the Shoal Creek trail that takes you directly to the Lady Bird Lake running trails. Also near the 7/11 off South Lamar (I love being near a gas station and slurpy run spot!)

-Natural Light. One thing I hear often these days is more buyers want: Openness and Light. This covers it. All the doors are French style (both rooms have doors leading to patio) as well as the downstairs living and dining. Skylight added in stairwell provide lots of light from above and the bathroom has an added window above the shower to capture that light. Great idea on the developer's part and master plan.

-Not a high rise. Believe it or not, not everyone wants to live in a high-rise condo. The fact these are town homes makes financing easier. Plus the charming character of them make it quite quaint, set by old homes now officing law firms and such, surrounded by trees and Shoal Creek.

I will definitely keep posting photos of the project as it comes along. Every time I go by the project has definitely advanced and the guys are there from morning until night! Here are a few now, hopefully you are a visionary....it is going to be a great finished product, please inquire about what units are going to be for sale next. Contact me for more information! 512.665.8787 And as always thanks for reading!! If you want to see other listings, feel free to do a search by browsing through my website!

Ashley Brinkman's Blog

Why Texas is Great: Economic Forecast 2012

Terrace at Shoal Creek: Affordable DT Condos, Get a bonus w/ Contract before Nov 31!!!*