Austin added 5100 jobs in March. That’s huge for being in the depths of a nationwide recession. And because job growth is the number 1 driving factor on the local real estate market, it could be a positive sign for the months ahead. Read the ABJ article.
Archive for April, 2009
The Austin Business Journal recently reported that Austin was the 2nd fastest growing metro area in the U.S. between 2007 and 2008. Austin’s population growth rate stood at 3.8% for that period, second only to Raleigh, NC at 4.3%.
Many readers commented that Californians were responsible for the majority of the growth. While several Californians did relocate to Austin, the vast majority of moves came from other parts of Texas. According to the most recent relocation report for Travis County published by NAR, Dallas, San Antonio and Houston accounted for over 7,278 households moving to Austin in 2007, while Los Angeles and San Diego combined only accounted for 1,384 household moves.
For comparison’s sake, more people moved to Austin from McAllen, TX than did from San Diego.
We believe that while job growth in Austin may be flat or negative this year, population growth will still continue as “economic migrants” move to Austin. While the job market may be competitive this year in Austin, it will still be much better than in other parts of the country and the cost of living is often much less expensive. Hence, we think Austin’s population will continue to grow at a slower pace than years past.
Coupled with a 47% decline in new home starts, a steady influx of new residents over the next few years has the potential to create a home shortage several years down the road, causing another dramatic swing in the real estate values assuming inflation does not become rampant and interest rates remain at reasonable levels.
Austin Home Prices Relative to the U.S.
Published April 1, 2009 National News Leave a CommentTags: National housing market, TX vs. US housing prices
The S&P’s Case-Schiller Index tracks home prices in the top 20 U.S. housing markets. The Index dropped a record amount in January, and according to the NY Times, the chief economist for MFR predicts that housing prices nationwide will not bottom until some time in 2010. I tend to agree with him, though I think Austin will bottom this year – it may have happened already this past January.
Austin was not included in the Index, but Dallas is a good barometer for Texas as a whole relative to housing prices in the U.S. You can see below why Texas has not been impacted by the downturn in the same way as other regions:
Clearly, Texas never had the run up that the coastal regions had, and it has not had the rampant unemployment that has plagued Michigan and the Midwest.
We have seen a tremendous uptick in purchase activity since mid February. Low mortgage rates coupled with the homebuyer tax credit has been especially effective in spurring “first time” and “move up” buying activity. While we anticipate rates to remain low for a while, it will be interesting to see what impact inflation may have on the market in the next 24 – 36 months.
