Economic & Real Estate Market Update for Central Texas

I sat next to my colleague, Sheri Brummett, from my Coldwell Banker office. So much information and are looking forward to receiving the slide presentation used.

I was thrilled to be invited to the Austin Mortgage Bankers Association luncheon this past week. I always enjoy hearing Jim Gaines, the guru of housing economics, speak. He is a Research Economist with the Texas A & M Research Center and spoke on the economic climate, inflation and how the housing market is doing in Central Texas. 

Thank you, Kristin Carroll, with Sente Mortgage, for the invite. Definitely well spent time...…knowledge is power. I always love working and spending time with you!

Jim Gaines has more than 35 years’ experience, primarily in real estate research and education, urban economics, land use analysis, development and project risk assessment.

He is a witty speaker and the gist of his message was the sky is not falling for Central Texas! We have good continued economic growth but at a slower pace. The economy has variables with the war in Ukraine, inflation and continued Pandemic issues. However, here are 9 things we know:

u Probable recession (maybe already) – Texas should fair okay 

u Population – people are coming because of our availability of jobs 

u Housing will be strong – seller’s market moving to more balance 

u Interest rates will hold back some demand for new and  existing homes

u Short supply will continue to fuel higher prices

uExtended construction time: labor and supplies more costly and short supply 

u Higher gas prices may affect demand in suburbs/exurbs

u MF rents will escalate as owner housing market recedes

u Energy may feed local economics; overall not as positive statewide

u Industrial market very strong; office market slower to get back

u Retail continues to move to expand

u Hotels, restaurants and other service businesses recovering

u Land Markets doing well, prices continue upward trend but at slower rate

Major concerns Jim outlined:

Domestic

u Inflation: food and fuel major factors

u Consumer activity – switch from goods to services

u Tight labor market

u Fed actions and monetary policies – uncertain results

u Lack of common cause and/or direction politically, socially, economically at all levels – divisiveness

Geo-Political

uChina: economy and political activity

uRussian-Ukrainian war and recessionary impact on Europe

uOil and gas inventories, transmission, refining capacity and prices

There are lots of variables that can change the landscape of our economy, on a dime. I’m glad to live in Central Texas and NOT planning to hit the panic button anytime soon! We are not bullet proof but with the huge corporate relocations/investments coming to Austin, bringing so many jobs, I believe our Central Texas 2 - 5+ year prognosis is looking good!