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HOUSING FORECAST GREATER AUSTIN for 2017

Posted by Gay Puckett on Thursday, January 19th, 2017 at 4:39pm.

Today three great minds came together at the JWMarriott before 700 industry folks for the annual 2017 Home Builders of Austin Housing Forecast: Eldon Rude, Principal of 360* Real Estate Analytics, Dr Greg Hallman,Senior Lecturer in Real Estate Finance at the University of Texas at Austin McCombs School of Business, and Colleen Sharp, VP of Kantar Futures.

Two great hours were spent by a packed ballroom of business leaders listening about the Austin, Texas, US economy, interest rates, job growth, Consumer confidence, housing starts, rents, prices, GDP, and the economic entwining of us and the world economies in China, India, EU, etc.

I want to recap my thoughts on this, with a focus on the Austin real estate markets. 

1. Austin has seen a tremendous run-up in the past ten years.  On average 40,000 jobs annually created.  We now have Austin unemployment at 3.0%, which essentially is "full employment" with talent hard to find to hire now.  Projections 20,000 jobs created annually moving forward.  Companies can't find talent to hire nor office vacancy space  to lease and expand in this hot market.  Apple has over 6,000 employees in Central TX -their biggest R&D outside Cupertino, CA, and is 100 percent full occupancy  in their 1 million square foot space in NW Austin.  Oracle has 600,000 square feet under construction off Riverside in SE Austin.

2. Austin's population in the SMA for 2016 is 2 million; and by 2020 it will e 2.3 million, and projected by 2030 will be 3 million, etc.  That leads me to discuss housing them all>  Homes, and apartments are needed!  (This means 'call me, you investors!')    there were 10,000 apartment units and 13,000 single family homes added in 2016;  Nov. 2016 permits issued were 13,375.  City wide apartment occupancy is 93.7% and rents have risen 5.2% in 12 months and 12% over 24 months.

Austin's housing resale market set a new record with 32,933 closings in 2016, up 4.4% with average prices up 5.1% to $348,376 and months of available inventory hovering at 2.0 months in December 2016, now 52 months below 4.0 months of available inventory.  (Buyers find it very hard to find housing, bidding wars make it worse, and sales are at a torrid pace.  Yes, hire a  REALTOR(R) now to make this experience a success.

In the Austin Luxury market, from $750,000 to $1 million their are 350 active listings, 800 sold in 2-016 and there is only a 5.4 month supply. However as you increase the prices up to $ 2 million, the supply is 10 months, and over $3 million a 35 month supply of homes on the luxury market.

Nationally, consumer confidence index is the best since 2007, currently at 113.   It fell in 2008-2009 to a low of less than 30 and has been on a 6 year climb back up to the current 113 level.  Confidence drives buying, and a feeling of job security.  

Interest rates will stay in the 4-5% range for 2017.  Low rates will continue because of  the global aging population that is saving, China will 1 Billion people with a 40% savings rate, and this leads to a large supply of capital out there.

In summary, if you would like to read the slide presentations from these three speakers, go to https://www.hbaaustin.com/2017/01/pent-demand-consumer-confidence-expected-drive-regional-housing-market-2017/

I am interested in your thoughts now.  How will you plan your investments after reading this?  I am here to help people if real estate in your area of interest.

 

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Gay Puckett, Broker Associate

ABR, CRS, GRI, CLHMS, REALTOR®


3933 Steck, Suite B-110 Austin, TX, 78759

Phone: (512) 917-1542 | Fax: (512) 857-1254
Email: Gay@GayPuckett.com

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