Eldon Rude of Austin MetroStudy gave his third quarter report, "Housing Update and Economic Outlook," last week, and I thought I would share some notes. In general, we have some ongoing challenges in our local market, but there are a number of factors that set us apart from more troubled parts of the country. We're not entirely out of the woods because of several possible national economic threats looming ahead, including - scarce availability of financing, selective corporate bailouts, scarce down-payment assistance, slowing job growth, and increase in foreclosures - but there are a number of positive signs, and as I've said in numerous articles, if you are looking for a place to relocate, Austin, Texas, should be high on your list!
Reasons include:
- Texas continues to be number one in job growth, with Austin high on all national lists for jobs, property appreciation and low inventory of homes for sale.
- Locally, Texas leads the nation in job growth, with 4 Texas metro markets in the top 10 for job creation, including Austin at #6.
- Single Family new home starts are down 42% nationally. SF starts are down 41% in Texas, although Texas is still #1 on the list for new starts.
- In the apartment market, occupancy is beginning to decline (at 91.4% city-wide), with rates flattening at $.98 per square foot on average.
- In the resale market, inventory is holding at 6 months, although we should anticipate an increase in the spring when more homes come on the market.
- Among sub-markets in the Austin area, Southern Travis County is still the most active in new home starts.
- The highest months of supply of finished vacant homes is in Lake South, where sales have slowed around high price points. Other areas with over a 7 months supply are Hays West, Central South Austin, Central North Austin, and Round Rock/183.
- Austin has the second lowest months of supply of new homes in all Metro Study markets nationally, second only to San Antonio. Austin is 4th lowest in resale inventory of all Metro Study markets nationally, after Houston, Denver and Sacramento. This makes our market well positioned to experience an early recovery.
- Economic boosters include: Austin has never experienced a "bubble" in home prices and prices are holding; inventories are manageable; foreclosures in Austin have remained moderate; Central Texas is poised for significant growth in population over the next 5-10 years; tight financing has created pent-up demand for homes that will give our market a boost when more financing options become available; businesses continue to locate in Austin
- Forbes magazine calls Austin "Recession Proof" back in May - a bold statement that has a lot of merit, even in these tough "recession-like" times
Phil Hutson has over 20 years real estate experience selling Austin real estate, and is the Broker/Owner of Showcase of Homes.
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