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.
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