Austin Economic & Housing Forecast
I attended the 3rd Annual Austin Housing Forecast recently to get a bead on where the Austin real estate market might be headed in 2011. Texas and Austin have done well economically in the midst of a nation-wide downturn, and this bodes well for Austin’s future economy and real estate market. I’ll try to sum up some of the things I learned below.
Texas in general has weathered the economic downturn well, seeing more new jobs created than any other state in 2010 with a 1.9% growth in jobs. Texas managed the housing crisis better than most states, as its large supply of available land helps prevent house prices from rising artificially. These factors and others are reasons for Texans to be confident economically, and this is reflected in the monthly consumer confidence index, where the West South Central (TX, LA, OK, AR) consumer confidence index of 67.9 is well ahead of the national average of 52.5.
Texas’ strong economy is certainly reflected in Austin’s, which is one of the leading US metro areas in job creation; from 2004-2009 the Austin metro area was #1 percentage-wise in wage and salary jobs created. In 2010 Austin had the 6th most job creations amongst metro service areas in the US. Austin’s 2.2% job growth is also highest amongst the top 15 metro service areas in terms of jobs created. This trend is expected to continue, with an anticipated 2.4% growth in jobs in 2011.
Much of Austin’s growth and relative economic stability can be attributed to its strong tech sector. The average tech wage in Austin is almost double that of a non-tech job. Small businesses are moving to Austin and creating new jobs while several large corporations look frequently for new hires and traditionally have helped keep the job market healthy. Tech jobs are expected to become an increasingly large part of Austin’s job sector:
Projected job growth in Austin from 2008-2018:
- 15.2% percent growth in convergence technologies
- 31% in creative media
- 6.2% in green industries
- 27.7% in lifesciences and healthcare.
This job growth should help fuel a healthy real estate market in Austin. Underemployed workers will get employment which matches their skill set and can use the added income to buy homes. Austin has a strong apartment market, and as jobs and wages increase apartment tenants can look towards purchasing their first house.
Whereas the amount of housing starts has been declining since the mid 2000s, the number is anticipated to stabilize in 2011 before rising again in 2012:
- 2006 16,000 housing starts
- 2008 8,000
- 2009 6,500
- 2010 6,000
- 2011 5800 anticipated
- 2012 7,000-8,000 anticipated
Austin was the 8th most searched city on realtor.com, so there is certainly interest to match the future growth in new starts. Austin continues to be an exciting city to live in, and I’m looking forward to what 2011 brings for our economy and the real estate market. If you’re looking to buy a new home in 2011 or to sell one, please don’t hesitate to get in touch with me.
-Maggie Falvey
