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.
According to the Bureau of Labor Statistics, Dallas-Plano-Irving and Fort Worth-Arlington metros reported a February-to-February growth rate of -2.1 percent. That placed them 13th among the state’s Metropolitan Statistical Areas (MSAs).
Houston-Sugar Land-Baytown’s annual employment growth rate was -3.1 percent, placing it 19th overall.
Texas’ unemployment rate in February was 8.3 percent. Amarillo had the lowest rate (5.7 percent) followed by Midland (5.8 percent). College Station-Bryan and Lubbock tied with 6 percent.