This from the Austin Business Journal today, Austin office market back to pre-recession levels. Let’s review a few snippets from the news article.
The Austin office market saw a trifecta of positive developments in the third quarter with a dramatic boost in absorption, decrease in sublease and large corporate move-ins. The shift is the best the local office market has seen since the recession began, according to Oxford Commercial’s latest quarterly report released Wednesday.
“I think you can now say that we’ve turned the darkest corner and have a stabilized market that has signs of further improving into the next two quarters,” Oxford Partner Kevin Kimbrough said.
Read the full story for more positive data points.
What does this commercial real estate news mean for the residential home sales market?
More than you might think.
Commercial real estate is a leading indicator of residential real estate in Austin. When Austin office space starts getting leased, it’s because businesses anticipate needing more space in the near future. More space for what? Employees.
That means hiring will increase, resulting ultimately in increased housing demand for the people moving to Austin to take new jobs. What we don’t know is whether or not things are going to swing into gear faster than anyone expects, or if improvement in unemployment rates will be slow and plodding.
What we do know about real estate market turns, both good and bad, is that they are usually well under way before we fully notice. That’s why it’s a good idea to keep an eye on the leading indicators such as the absorption of commercial real estate.