News Alert! Austin to be the first U.S. city to recover from recession!
Austin and San Antonio will be the first two U.S. cities to recover from the recession, according to a new national forecast from IHS Global Insight. The forecast from the Lexington, Mass. economic research firm suggests the two Texas cities will bounce back to their pre-recession job levels sometime next year.
Eight other metropolitan areas are predicted to recover by 2011, a group that includes Texas' two largest markets, Dallas-Fort Worth and Houston, along with Washington, D.C. IHS Global Insight said most metros will start adding employment next year, but the increases are likely to be tepid. "Solid gains will not return for the majority of the country until 2011," the report said.
Austin is also named one of the 20 best performing metropolitan areas in the second quarter of 2009, according to a study by the Brookings Institution. (Austin Business Journal).
Here are some real stats from the MLS regarding home sales for October compared to last year:
Units for Sale: New listings are down 7.39%. Pendings are up 37.78%. Solds increased by 29.37%
As for Average Prices: The "New Listings" average list price is down 15.68% to $276,975. In October 2008 the average list price was $328,479. Sold average sales prices decreased 2.04% to $234,521. For October 2008 it was $239,401.
The current copy of The Economist has as its cover story the comparison of Texas versus California, the gist being that Texas is now surpassing California as the primary growth state for the union. Not only does Texas host more Fortune 500 companies than any other U.S. state, the Texas employment picture has been much more positive than most of the rest of the nation. Over the past year, the US has seen employment decline by 4.2%, but Texas has only dropped 2.6%, with only about 275,000 jobs being lost. Remarkably, of the four major cities in Texas, Austin's economy has held up the best.
Another very positive report for Austin came from the Brookings Institute which ranked Austin as the top city in the US as far as the growth rate of its Gross Metropolitan Product (GMP). GMP is a similar reading to GDP, but for just a metropolitan area. Since the peak of the economy in recent years, Austin's GMP has remained fairly flat, while the US average has dropped about 3.3%. Likewise, when comparing the top 100 cities in the United States, Austin remains in the top quintile as far as average wages and house prices. In fact, Austin house prices are up 2.4% over the past year while the US average is down 6.3%.
A recent survey of public and private builders across the country from John Burns Real Estate Consulting shows that Texas saw new home sales, traffic and expectations pick up in January. The survey gathered information from 236 home building industry executives. (Austin Business Journal, Feb. 25th, 2009). While home prices are declining, we look forward to calling a bottom to home prices, but we're not there yet.
"'I spent several days in Texas this month and can confirm that the pick-up is real and is driven by lower mortgage rates in an area where home price appreciation was insignificant and the economy is still OK,' said John Burns, CEO of Irvine, Calif.-based John Burns Real Estate Consulting.
Economist Angelos Angelou on Thursday painted a picture of Austin in 2009 that doesn't look pretty: anemic job growth, falling average wages and retail sales, and sharply rising vacancy rates for commercial real estate and apartments. It was one of the gloomiest Austin forecasts that Angelou has given in 25 years.
But, bad as it is, he said that Austin will look good this year compared with the rest of the country. "2009 will be one of the toughest years that Austin has experienced," Angelou said. But "we are going to weather the storm better than many places around the country." Other economists share his viewpoint that Austin and Texas will escape the worst of the recession.
"We can't really hide from the vicissitudes of a severe recession," said Bud Weinstein, director of the Center for Economic Development at the University of North Texas. But "I don't think it is going to be as bad here as in other parts of the country," Weinstein said. "We didn't have the same excesses. We didn't have the housing bubble. And, until recently, we were insulated by rising energy prices." the U.S. as a whole lost 2.6 million jobs last year, a drop of about 2 percent. The Austin metro area, by contrast, added 19,000 jobs last year for a growth rate of 2.5 percent. For 2009, it won't take much to do better than the nation, which is in a deep downturn. (Kirk Ladendorf, AMERICAN-STATESMAN STAFF)
Austin and San Antonio lead our list of places where your money goes farthest. Residents of both enjoy affordable housing and promising prospects for job growth in coming years (Inman News).
"Texas, as a whole, is one of the few economies that's performing extremely well because of the energy and technology sectors," says Andrew Gledhill, an economist at Moody's Economy.com.
From the Austin Business Journal we read that Austin job creation slower, but still outpacing rivals. Employment in the Austin-Round Rock region increased 1.9 percent between October 2007 and October 2008, outpacing many of Austin's economic development competitors, according to data released Tuesday by the U.S. Bureau of Labor Statistics.
The local region added about 14,700 jobs in the 12-month period, bringing its total employment figure to roughly 781,000, according to the report.
How can the Austin Market continue to appreciate despite a buyers market? First, the Austin market has not had double digit appreciation during the past few years. During the years from 2001 to 2004, after the Dot.com bust, the market in Austin was somewhat soft. The median price rose by about 3.5% per year, on average.
From 2005 through 2007 our market tightened up, and we began to see very low inventory and strong demand, especially in the central areas. Throughout Austin, especially in suburban areas, builders produced inventory to keep up with demand. Overall, appreciation in Austin has been steady, but reasonable. Home prices have not risen excessively, and are not falling precipitously. Austin home prices are still in line with local salaries.
Second, the real estate market always reflects the job market. Approximately 20,000 new jobs were added during the past year. Our unemployment level is about 3.5%, a level that some would consider full employment. Retail outlets are opening at a fast clip-a result of widespread employment. New jobs are being created as companies move here and Austin companies expand. Jobs bring in people, and people buy homes.
Nationally, single-family home values decreased 7.5% while condo values declined 9.0% during this same period. The Austin Business Journal lists Austin as #3 in the country of 'Recession Proof' cities, citing dropping unemployment and affordable home prices that continue to rise.
2008 Home Appraisals are going UP. Austin Listed as United States 'Top Sellers' Markets' (#3! Right behind Raleigh, NC #1 and San Francisco CA, #2). The great news is there is plenty of inventory to choose from at affordable prices!
According to the Austin American Statesman, we can expect to see increases again in the 2008 property appraisals when you get these notices in your mail soon. Chief appraiser Patrick Brown said countywide the average home value is up 11.5 percent, to $285,511 compared with $256,058 in 2007. In the City of Austin, the average home value is $266,807, up 12.55 percent from $237,055 in 2007, Brown said. It should be emphasized these figures are averages, so not all homes will increase some might even decline in the broad spectrum of things.
Brown tells us that this is not to say Texas and Austin haven't experienced fallout from the national housing troubles and tighter mortgage lending practices. Home sales have cooled from last year, however the value of these homes has continued to go up!
Chief appraiser Bill Carroll said Williamson County home values have been rising an average of 7 percent to 9 percent in recent years, "so we haven't been as exposed to a volatile market like a lot of the rest of the country," and we can expect to see 2008 values climb about 6 percent on average. This is in line with what we've seen for years, despite the national market fluctuations. So, it's good news for those of us who live here in central Texas.
If you are a buyer, seller, or investor and would rather speak directly with Rob and Carolyn Abbott about Austin Real Estate and your specific Real Estate related goals, please feel free to contact us anytime at 512-627-3711 or visit our website at www.abbottrealty.net
Recently, from Entrepreneur Magazine, we read this about Austin's potential in 2008: The Top Places to Buy....Whether you're an investor like me or you're looking to purchase that next move up, here are my picks for the best areas to buy a home:
Killeen, Round Rock, Austin, Texas: "....Round Rock and Austin have seen incredible job growth and very stable home prices despite the downturn nationwide. Jobs continue to grow here--a factor for keeping inventory low and prices stable. " (Danielle Babb | January 23, 2008)
Austin continues to hold promise as a great place to live and especially, invest in! We see the buyers market we've entered into at this moment we see as part of a NORMAL market environment, unlike the more publicized national markets in the East and West with the dramatic ups and downs we read about in the news. Not only that, but it's a buyers market with continuing increase in prices...good for buyers (more choice) and sellers (higher prices!).
From Paul Kaihla, CNNMoney.com: Projected median sales prices for single-family homes in Austin: Q1 2008: $186,350 Q4 2009: $195,060 Growth rate: 4.7 percent
In Austin, the rental market takes a backseat to buyers, many of whom hold high-paying jobs with tech giants like Dell, IBM, and Freescale Semiconductors. Austin's population is well educated -- 40 percent have a university degree -- and the Texas capital ranks among the top major metropolitan areas for business startups per capita. Austin also has the highest percent age of residents in the coveted 25- to 34-year-old demographic and, not coincidentally, the highest concentration of live music venues in the country. The labor market is so hot that shortages of engineers and product managers are driving double-digit wage hikes in those occupations.
But unlike other creative-class capitals, Austin doesn't price white-collar talent out of the housing market. At $200,000, the median sales price for a single-family home is about a third of that in San Francisco. But the gap is starting to close: While home prices in San Francisco have barely budged since the market peaked in 2005, prices in Austin have risen by 6 percent. That has prompted major builders to lay groundwork for some of the largest new master-planned communities in the country - at the very time that competitors are fleeing other Sun Belt metros. "
As one of Austins top REALTOR husband wife teams, we keep up with the day to day market changes. We cannot stress enough how important it is to check in with a knowledgeable agent to determine the facts of Austin Real Estate trending, as the national news about real estate is not often a template that fits Austin's unique market place. We feel Austin provides a healthy and normal market, and we expect to see prices continue to appreciate even with an increase in inventory as they have for the last 3 years.
Meanwhile, it's my experience that rental property returns are increasing, as supply is tightening in desirable areas as spooked investors move out. TWe have been increasing the prices on re-leased homes from 50-100 dollars per month. This bodes well for those looking into a buy and hold strategy.
This is a great time to buy and hold property. This is the investment philosophy most used by out of state investors we work with. Austin was recently cited as #4 in the top 10 Tech cities in the U.S. (WIRED magazine) and we see this positioning our college/tech centered city as ripe for further growth and continued influx of Real Estate investment. Nearby Cedar Park was recently cited as a Top City for Families by the Austin Business Journal. Not only this, but Foreclosures are dropping in the Austin area; Austin fares better than other counties in the state. According to the American-Statesman on June 22 (quoting Daniel Kah), "In Central Texas, the economy is still growing strongly. The unemployment rate is almost as low as it can get. All the economic indicators are all pointing in the right direction," We agree these positive indicators point towards strong growth in the rental and resale market to continue into 2008.
This is also the best time to sell real estate that we've seen for the last 6 years. If you'd like more information on a specific area or Real Estate related advice for your own particular situation--whether you are a Buyer, Seller, or Investor--please feel free to call us for a private consultation at 512-627-3711.
THE AUSTIN MARKET: Anyone looking for real home appreciation in a market that defies the 'bubble burst' reverse trends we hear about in the coastal (big city) markets across the States should strongly consider Austin as a prime Real Estate investment.
We continue to see a solid upward trend in Austin. These are great times to sell as price appreciation is on it's way up, but even better to get in on buying a home while there is time. Austin offers an exciting (undervalued) home price scenario (Austin homes were recently ranked about 5% undervalued according to USA Today). The reason investors and buyers from abroad are considering the Austin real estate market as investment and personal ownership is because Austin has been unaffected by the market 'bubble' (in fact it has been undervalued the last 4 years) and promises strong growth with it's improving infrastructure and continued investment by high tech companies, the most recent example of which is Samsung who are currently building an enormous headquarters in North Austin.
While new home builders continue to produce at a healthy pace, the rising costs of materials have hurt their ability to compete with resale homes, so we are seeing a push toward buying resale homes as they offer more for less and don't have to worry about increased building costs. It's about time (our sellers are thinking!)
From our experience helping buyers & investors purchase NEW, RESALE, HUD and PRE-FORECLOSED homes, we think it's a great time to purchase a new home, with rates low and a market moving upwards.
Selling? Call us for our complimentary market analysis or with any questions about the market in your area, this is our area of expertise! Remember, different areas within Austin have their own 'micro-markets' according to demand and sales history which must be looked at individually by a professional.
Rob and Carolyn Abbott, REALTORS, are an award winning husband and wife team...we have proven ourselves over the years with our effective marketing strategies and unsurpassed customer service. We are on the cutting edge of new technologies in marketing your home--our listings receive comprehensive internet exposure, are frequently advertised in magazine and printed media, experience REALTOR tours for the area, open houses and much more.
NEW HOME SPECIALISTS Remember, when buying new homes (another specialty of ours) you do NOT get a better price on the new home without a REALTOR. Realtor commissions are built in and have no effect on the sales price of the house. What you DO get is no representation vs. the well represented new home companies.
INTERESTED IN FORECLOSURES/HUD/VA HOMES?
We are regarded as experts regarding the sale and purchase of residential foreclosures and HUD-Owned homes. Should you desire to view these sorts of homes as well, you can with us! If you are facing foreclosure, we are experienced with the short sale and helping you through the process of getting out of your dilemma with your credit in tact (call for more information).
With Rob and Carolyn Abbott, you have the option to purchase from the increasing number of foreclosed homes in Austin and surrounding areas--many now priced well under "As-Is" market value--we can say that there is more inventory in this market than we've seen in the last 4 years, and it's growing! This allows you the opportunity for a great buy on a HUD-Owned home--ideal for investors or those starting out with some fixer-upper in them!
**Some brokers are not registered to buy HUD-owned homes, or don't have or want the experience to represent, advise, and help their buyers through the complicated process of purchasing a HUD home.
Austin is a wonderful place to live, and the time has never been better to begin ownership or take advantage of your move-up opportunities. Trust us with your real estate needs, we are dedicated to results! Find out why the majority of our clients are from referral only! "Excellence x2!"
Approximate Location Boundaries: Travis, Hays, and Williamson Counties
Location Characteristics: Austin is a captivating city full of diversity, beauty, entertainment and a wealth of job opportunities. Whether you are looking for a home in the rolling hills or a condo with cityscape view, you can find it not too far from the vibrant musical culture and gorgeous parks downtown. In Austin, whether you choose to enjoy an afternoon of major college football, dine at any of the hundreds of fantastic restaurants, or relax in a spring-fed pool amidst the beautiful preserved greenbelts of Zilker Park is up to you...it's your city to explore in your time. Austin brings a little something for everyone, Come discover it's Wealth!
About Rob & Carolyn Abbott:
We are a husband/wife team based in Austin Texas. We are multi-million dollar producers who excel in sales and buyer representation with unsurpassed service, and also offer investors in real estate unsurpassed property management services with Abbott Property Management. We stand amongst the top Realtors in Texas. Year after year we can count ourselves one of the Top Teams in Austin. We pride ourselves on our very satisfied clients who provide us with the bulk of our thriving business through referral. We know Real Estate is a SERVICE industry, and are dedicated to helping you meet your goals and listening to your needs. We believe that honesty, integrity, and a total commitment to serve you is what it takes to exceed your expectations in reaching your Real Estate goals. Our desire is to create a hassle-free experience for you, no matter whether you are purchasing or selling. Remember, our business is well over 80% referrals from previous satisfied clients; this is great news for your real estate experience with us. We truly strive to embody our slogan: "Excellence x2!"
These reports reflect the views and opinions of their authors and are not necessarily the views and opinions of Realty Times.
