I was at an economic forecast luncheon last week at the Oak Hill Business and Professionals Association and the speaker talked about how great the job growth is in Austin. Interestingly, he said the current level of job growth in Austin is about as high as we like it to be – strong and steady, not too heated. When jobs grow too fast, it creates problems in the workforce as employers have to compete against each other for talent, and you start seeing job hopping and shortages in the workforce that make it hard for companies to expand and grow.
The article below from the Austin Statesman shows that we’re now back to the job growth rate of the year 2000 in Austin. Easy does it Austin! Job growth drives the real estate market more than any other factor in Austin. We saw seen good real estate value appreciation in many areas of Austin last year, but like job growth, too much can cause unwanted side effects. I’m hoping we stay in the 8% to 15% appreciation rate range for 2007, but Sylvia and I are already seeing a very strong market in Southwest Austin and many homes are selling over list price in a few days, just like last summer.
The other interesting thing the speaker said was that some of the institutional investors he knows think that Austin is actually still in the early stages of this real estate boom cycle and that we have plenty of ground ahead of us. Finally, he said he thinks the downtown condos are going to be overbuilt if everything in the pipeline is actually constructed. The early projects will sell out and do ok, but the next wave may find a saturated market. He thinks some of the projects on the drawing board won’t actuially be built. It’s also not clear how the downtown streets in Austin are going to handle an additional 20,000+ vehicles that these new highrise condos will bring. Especially at intersections such as Lamar and 5th and Lamar and 6th.
Here is the news story.
Area’s job growth is strongest since 2000
Five-county region posts 4.9 pecent annual growth rate
Thursday, March 08, 2007
The Austin area’s job picture had a strong start this year, according to revised figures released by the Texas Workforce Commission today.
The five-county region added 33,900 jobs.
That’s a 4.9 percent annual job growth rate, which is a six-year high as well as one of the state’s highest rates (Midland’s much smaller job market saw a 5 percent annual growth rate).
The total Austin work force, excluding agricultural jobs, reached a total of 730,300 jobs.
“This has pretty much been positive growth for Austin,” said Veronica Downey, a labor market analyst for the agency.
Before the revisions, the state agency said the region, which includes Travis, Williamson, Caldwell, Bastrop and Hays counties, added jobs at a 4.4 percent rate.
It also marks the strongest job market for the region since 2000, when the area posted a 5.9 percent growth rate in January 2000 at the tail end of the high-tech boom.
In terms of total new jobs, Houston led the state with 99,100 (a 4.2 percent growth rate), with Dallas coming in second with 78,900 jobs (a 4 percent rate) and Austin coming in third.