Austin: Leading the Way in a Buyer's Market

For all that the nightly news might suggest otherwise, this is a great buying climate -- in fact it's a buyer's market much like 2005. Investment nerves are not your friends. When you look at the latest figures about Austin, those nerves don't even make sense.

If you pick up the June 25, 2010 issue of Forbes, Austin is on the magazine's list of American "Recovery Capitals." Using data from both a Brooking's study and from Moody's Economy.com, the editors didn't just pick Austin to make the cut, they put it at the top of a list of thriving communities. The selection was based on one supremely telling factor -- employment.

According to Forbes, the projected annual employment growth rate for the city from 2010 to 2014 is 3.3%, with the projected gross metropolitan growth rate at 6.2%.

The most recent unemployment figures for Austin bear out that optimism:

- 7.6% in April,
- 7.3% in June,
- and just 7% in August.

That's a curve headed in the right direction. It's even more impressive when you stop to consider that after all the stimulus efforts and the steady rehabilitation of the automotive industry, the national employment rate continues to hover at just under 10%

The Texas Workforce Commission and the U.S. Bureau of Labor Statistics released figures in June that placed Austin at the top of 50 major metropolitan areas studied. Over a one-year period, Austin added 4,000 jobs, an increase of 0.5% (and was only one of four metro areas to see a year-over-year increase.)

So how did the metro "competition" do in the same period?

Dallas jobs increased just 0.3%, but the other major metropolitan areas in Texas pulled up negative numbers:

- Fort Worth at -0.3%,
- and Houston and San Antonio both at -0.9%.

Back in April 2008, Forbes predicted that Austin was the third-most recession proof city in the nation, citing:

- a lack of a housing bubble,
- low median home prices,
- low unemployment,
- and strong job-growth segments with quick recovery potential.

In June of this year, the Brooking's Institute reaffirmed that judgement, again placing Austin in the third-best position for recession-proof status. The latest study looked at the 100 largest metropolitan areas in the nation. Austin came in behind Albany, New York and Augusta, Georgia and ahead of Baton Rouge, Louisiana.

So, what's the icing on this statistical cake? That was supplied by the Texas Association of Realtors on August 2 when they released their Texas Quarterly Housing Report. The number of real estate sales in Texas have increased for the third quarter in a row!

- Sales of existing single-family homes for April to June were up 14% over 2009.
- The median sales price remained essentially unchanged at $149,200.

Caution may be a good strategy in other markets, but not in Austin. Interest rates are low. Prices are low. Inventory is solid. Basically, if you don't take advantage of the favorable climate now, you're going to look back and wish you had.

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