Austin was recently featured on the CBS Evening News as the city with the strongest job growth in the U.S. This is somewhat of an “all sunshine” puff piece, but it nevertheless highlights some of the good things happening in Austin. Job growth drives real estate demand, so if this year keeps heading in the right direction with jobs in Austin, we should see the Austin real estate demand start picking up as more job seekers move here and more companies relocate to Austin.
Job growth is the major leading indicator for the real estate market. When employers are hiring, buyers are buying. Though Austin remains in slightly negative territory, it’s the direction of the trend we care about. Austin unemployment never got as bad as the national numbers, and remains in the 6% range compared to 10% nationwide.
So when people ask “how is the real estate market in Austin TX”, the question can always be answered in terms of supply and demand. We are expecting a shortage in supply due to over-correction by builders, and job growth improvement will cause increased demand to coincide with inventory shrinkage, causing prices to rise.
Will this happen this summer? I don’t think so. But these indicators are pointing to a possibly robust 2011.
The following press release from the Real Estate Center in College Station discusses job growth in Texas. Used with permission.
COLLEGE STATION, Tex. (Real Estate Center) — College Station-Bryan (1.4 percent), Killeen-Temple-Fort Hood (0.8 percent), Waco (0.2 percent) and McAllen-Edinburg-Mission (0.1 percent) led the state in employment growth rates during the year ending in February. They were the only metros in positive territory.
That report comes from Dr. Ali Anari and Dr. Mark Dotzour in their Monthly Review of the Texas Economy for March. The other 22 metros had net job losses, say the Real Estate Center researchers.
The Austin-Round Rock-San Marcos metro almost made it into positive territory, ranking fifth with a -0.6 percent job growth loss. San Antonio-New Braunfels employment growth was down 2 percent and ranked 12th.
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I’ll be attending the Angelou Economics Austin Economic Forecast today, hosted by the Oak Hill Business and Professional Association. This is a rerun of the presentation presented earlier in the year (but which costs $270 to attend). The power points and information are posted up on the Angelou website, but I always appreciate the question and answer dialog that occurs at the live presentation.
Most interesting for me, and I think others who attend each year, is the perspective gained on how well Austin really is doing relative to just about anywhere else in the country. Yes, our real estate market has slowed down, though mostly in the upper price ranges. Yes, unemployment has risen, though still lower than Texas or the Nation. Yes, there have been layoffs, though job growth remains slightly positive and will improve again in 2010. But compared to any place else in the U.S., Austin is chugging along very well. Check the links below for the data.
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