Austin Ranked Second Healthiest Housing Market by Builders

From the Texas A&M Real Estate Center Newsletter:

FIVE TEXAS CITIES NAMED HEALTHIEST HOUSING MARKETS
TEXAS (Builder) – Five Texas cities swept the top spots on Builder magazine’s list of “Healthiest Housing Markets for 2009.”
Houston ranked first, Austin second, Fort Worth third, San Antonio fourth and Dallas fifth.
Rounding out the top ten were Raleigh, N.C., Seattle, Indianapolis, Ind., Fayetteville, Ark., and Washington D.C.
To compile the list, Builder analyzed the top 75 housing markets in the country, ranking them based on population trends and job growth, perennial drivers of housing demand. They also looked at home prices and the number of building permits.

It’s possible that without Hurricane Ike, Houston would have been below Austin and we’d be number one. However, what this ranking really means is that Austin and Texas are the “least worse” markets for builders. It’s all relative. Nevertheless, we’ll take it.

Posted by Steve
7 years ago
Steve

Steve is a Real Estate Blogger, Husband and Dad, UT Austin Grad, Runner, Real Estate Broker and owner of Crossland Team and Crossland Real Estate in Austin TX.

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New Austinite - 7 years ago

Did they miss any Texas cities? 😉 Honestly, this is comical.

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Tim S - 7 years ago

We know how on top of the game builders usually are! Guess they haven’t figured out that the crash in oil prices is going to reverberate through the Texas market in 2009.

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Ed - 7 years ago

Unbelieveable!

The builders (THE ONES WHO ALLOCATED BILLIONS OF DALLARS FOR CONSTRUCTION) voted Texas was a great place to build because of cheap land, high income, large universities and great schools and you guys are whinning!

Oil prices??? Oil prices came back to normal after speculators ran up the prices. It didn’t crash, it normalized. And how much of the population made themselves dependend on $140 oil?

Move out to California buddy and see a $600K home with 3/2 in the suburds that was $900K in 2005 fits your pessimism no matter what you income level.

Hopefully that will puts the final straw on Leon or whoever that was who argued Austin real estate is going to drop 40%.

Austin is healthy real estate market. Bold prediction of huge swings down or up for that matter is just ridiculous. Interest rates are low, housing in Texas is cheap relative to other like kind cities and every poll, maganzine, or other periocical says Austin is healthy. Be happy!

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Leon - 7 years ago

Ed,

Perhaps 40% is a bit too pessimistic, although still a possibility. But a 20% decline from here is very possible. We’re already down 5% year over year. A 20% decline would put the medium price at $144K vs. $180K where we are now. Most areas of the country is already down 15-25%. I don’t understand why you feel we are somehow immune.

If unemployment doubles in Austin, that’s a very realistic decline. I’m anxiously waiting for the Texas unemployment stats for January. I bet you will see employers in Texas and Austin slashing a huge number of jobs as the unemployment is just starting to accelerate in Texas. We already know what the national numbers are: 600K jobs lost. Unemployment stands at 7.6%.

We are also in danger of interest rates jumping. The government is about to borrow a huge amount of money to fund this stimulus plan. This is going to be a “crowding” out effect as the government borrows money reducing the availability of credit for everything else. Remember that every interest rate in the country is based on the US Treasuries.

Steve,

Do you have any stats back from the 1980’s when Texas went thru a real estate crash? How bad was that decline? How long did it take to recover from the lows then?

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Ed - 7 years ago

Double the unemployment rate is realistic??? No way, No how. You Bear you. hehe

It will not be that much of a movement in unemployment. That will be a catastrophic changes in the local economy. We are 15 months into a recession and Bernake says it will continue through early 2010. We are going to lose some jobs, but they will not pushTexas into a drop of 20%. Texas didn’t have the run up of 70% to 100% over the 5 year boom. Texas actually went down over that period and bumped up a measured 15% or so over the past 3 years.

Interest rates will remain low until the fed feels we are out of the woods. Inflation is not the problem and deficit spending in not an issue in recent history.

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Leon Fu - 7 years ago

Ed,

No way?!! Have you looked at the statistics and do you realize the speed at which we are losing jobs??? This economy is shedding 600K jobs PER MONTH and the pace of job losses are ACCELERATING! Unemployment is increasing at .5 % per month at the moment. Austin’s unemployment is just starting to accelerate. The unemployment rate in Austin is 5.2%. Doubling to 10% can happen in a year. In fact, California, Michigan, Nevada, Rhode Island, and South Carolina are already at double digit unemployment. The data is available from the Bureau of Labor Statistics’ website (www.bls.gov).

It’s not only realistic; it has ALREADY happened to many states and cities around the country. 5 states are already there today. A 20% drop in Texas would actually out perform just about any other place in the country. Many states have ALREADY dropped 20-40%.

I believe there are going to be 2 parts to this unfolding tragedy. The first part is already underway and that’s the deleveraging and deflationary spiral we are currently in. This phase wiping out all the people who have been “irresponsible”; that is the people that spend too much, borrowed too much, lived beyond their means, etc. and have done all the things we regard as irresponsible. The people with cash and liquidity will benefit as prices across all asset classes drop and their cash is worth increasingly more.

The second part is much more sinister. When the situation gets dire enough, the government turns on the printing as a last resort in a desperate move to restart the economy, it will be the savers and “responsible” people (people that put money away, lived below their means, etc etc.) that get wiped out as inflation destroys their savings. This will be the time to shift gears and spend money as fast as you can on necessities or on items that will keep pace with the inflation as the currency is quickly losing its value. That will includes real estate, metals, and other hard assets. Even firearms and ammunition will be in demand as crime rises and police departments don’t have the money to increase patrols.

Success in the market will depend on recognizing when the paradigm has shifted from the deflationary spiral we are in towards hyper inflation…

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Ed - 7 years ago

Hard assest go up in price during inflation, not down. We are in recession and printing money to pay our debts and enforcing them with trade and military is nothing new.

Time will tell. And time will prove me right, and you wrong.

Texas economy is one of the strongest in the nation. Be happy and buy real estate.

Fire arms and ammunition??? You have got to be kidding me.

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Jason - 7 years ago

Steve,

How about an article on the vaporizing itemized deductions and what that will do to the higher priced market?

Now that the new administration has outlined the budget for the next few years and have publicly announced trying to phase out itemized deductions for joint households with AGI over $250,000 in 2011, what do you think that will do to the $500K-$750K housing inventory?

As a buyer looking over all of the inventory in that range, it makes me get cold feet. How many itemized deductions are there tied to home loans?

Jason

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