I love this time of year and make it a practice to attend as many economic forecasts as I can for the year. I like to hear all the perspectives and always learn something. Recently I attended the Home Builders Association Greater Austin 2019 Housing forecast at the AT & T Center. HBA President Becky Collins introduced us to Eldon Rude, Principle, 360 Real Estate Analytics, Mollie Carmichael, Principle, Meyers Research LLC and Julia Coronado, President and Founder MacroPolicy Perspectives.
I’m still digesting all the informative material. Julia‘s presentation of the global view indicates the global economy is slowing, which is no surprise. We've been seeing signs of that in the 4th quarter of 2018.
Comparing the global and local over view was enlightening and, put things in perspective. The latest in Home Trends (that can be a post all in of its own) was very intriguing but also not surprising.
Eldon‘s focus was on the Austin forecast which I was most interested in. His advice is spot on “Study the economic data and not negative headlines.” There are many articles that the headlines are distorted with articles not based on the facts (what else is new). Austin is off to a great start in 2019 and it appears we will have a strong spring market. The Economic data suggests continued strong demand for housing in Austin. Is there concern for cautious optimism, of course, we have a supply problem and the last 7 years our sales have grown dramatically. Companies are starting to lower expectations because they can’t continue to sustain the phenomenal growth rate and earnings and this affects the housing market.
In a nutshell homes starts and sales will be somewhat slower/flatter in 2019, nationally, regionally and locally.
In the last 30-90 days the global economy has slowed causing the national inflation to flatten. Inflation is the focus on the Federal Reserve which in turn slows rates rising. It appears the possibility of rates hikes in 2019 currently is slim but we need to be watchful. Large corporate relocation announcements will continue through 2019.
The main factors to consider for Austin:
- Continued strong job growth
- Good sales in December and January of 2019..strong spring market
- Buyer confidence is more fragile
- Higher costs and potential rate hikes later in 2019
- Builder/developer challenges
Available land (location)
Developed in a timely manner
Austin has a great start for the year due to strong sales in December and January which bodes well for a strong spring market. We all will be watching as new inventory comes on the market and goes off. Following the data will be the key to further predictions for 2019!
I've attended other forecasts this January and the there is a common thread with the same message: "Economics is politics but don't focus on politics, names or a party." The facts are the tax reform and removal of regulations have done wonders for our economy. The American economy hasn't been this good in 10 years. The tariffs have been settled between Mexico and Canada. China is another story but remember we buy 5 times more than they buy from us. The only thing we really need from China is leather. We can't cure leather and China can because they have no emission controls.
With all this talk about recession remember individual debt is down which means even if we get talked to death about being in one..it won't be a major one.
Many say Austin is becoming unafforable. Compared to the west and east coasts we are still VERY affordable even with all the companies moving here. I guess if you really want affordabilty than move to Lubbock! LOL!
We need inventory..... if you are thinking of selling there is no better time than now! Reach out to me so we can discuss current market trends in NW Austin. I can help position your home to reach the audience looking to purchase your home. Hiring the RIGHT NW Austin Realtor® is critical to your home selling success!