Austin Joining Nation’s Strongest Housing Markets
Each Saturday, the Austin Statesman has a real estate related article in the business section. The one below is from last Saturday’s May 6 edition. The only thing I would add is that Austin is still a tale of two markets. The booming market, and the still sluggish market that has not yet gained traction. Eventually, a rising tide floats all boats, as they say, but our experience is still that certain neighborhoods in Areas 10 and SW are red hot, as well as all Central Austin neighborhoods, while other parts of Austin, such as Pflugerville and other outskirt suburbs continue to be weak on the resale side as new homes are attracting most buyers. But when I say “weak”, even most of those areas are showing gains, just not the type you read about for Austin in general. So when we see these articles, it’s important to remember that the story is often a macro view and that the news is even better in some areas, not as good in others. It’s a great time to buy real estate in Austin – but it ain’t cherry picking – you have to know where to look and why.
Full article posted below.
Housing strength shifts to new markets – Texas is riding a boom as other markets cool.By James R. Hagerty
THE WALL STREET JOURNAL (As printed in Austin Statesman)
Saturday, May 06, 2006
As home sales cool on the East and West coasts, some cities that missed out on the real estate boom, such as Austin, are becoming the strongest markets.
A look at inventories of unsold homes, prices and employment trends points to generally positive signs in Austin, Houston, Dallas and Atlanta — cities that have seen only modest home price gains in recent years.
Metropolitan areas whose housing markets look less healthy, at least in the short term, include Boston, Los Angeles, Miami, Minneapolis, New York, Philadelphia and San Francisco. All of them have growing inventories of homes and relatively weak job growth. As a result, houses that a year or two ago might have sold in hours now are languishing on the market for months, and some sellers are cutting prices.
Texas has been a laggard in recent years, partly because job markets — which are the biggest driver of housing demand — were weak in some cities and land for new houses is plentiful. Now, the state’s job market is strong, as cities here are benefiting from the oil boom and an influx of people from abroad and elsewhere in the United States, and housing demand is keeping up with the relentless spread of new subdivisions as Texas cities sprawl. Investors, many from California, are adding to the demand.
After four years of negative to flat job growth, the Central Texas job market roared back to life in 2005. Central Texas now has the strongest job growth rate in the state — nearly 4.5 percent last year, more than double the state average of about 2.1 percent.
This job growth is helping fuel an already-hot housing market in Central Texas, which had been cool during much of the national real estate boom.
For the first three months of this year, sales of single-family homes in the Austin area were up 14 percent and the median price increased 8 percent to $167,140.
Overall, home prices in Texas could rise 6 percent to 9 percent annually over the next several years, says James Gaines, an economist at Texas A&M University’s Real Estate Center in College Station. He says the state is attracting residents and employers because its housing remains very affordable by national standards. “I don’t see a slowdown coming,” says Lorraine Abercrombie, chairwoman of the Houston Association of Realtors and director of marketing for Greenwood King Properties.
The time single-family homes stayed on the market in Central Texas fell 12 percent during the first three months of this year from the first quarter of 2005.